Supplier News

China – Macau drives Las Vegas Sands to record quarter

By Phil - 18 October 2013

Las Vegas Sands  is holding another winning hand from the biggest gamble it has ever taken; investing so heavily in Macau and Singapore.

The threat of financial turmoil seems a long way away now with record results in Macau driving record quarterly sales across the board at Las Vegas Sands with net revenue for the quarter ending September 30 up 31.7 per cent to a record US$3.57bn.

Total net revenues for Sands China increased 42.7 per cent to $2.34bn in the third quarter of 2013, compared to $1.64bn in the third quarter of 2012.

Sheldon Adelson, Chairman and Chief Executive Officer, said: “I am extremely pleased to report outstanding quarterly financial results that reflect continued strong growth in revenue, cash flow and earnings per share. The focused and consistent execution of our global growth strategy, which leverages the power of our convention-based Integrated Resort business model, is increasingly being reflected in our financial results. Continued execution of that strategy will extend our position as the global leader in Integrated Resort development and operation.

“In Macau, we delivered record financial results, with strong growth and operating momentum reflected in every segment of our business. We welcomed more than 16m visits during the quarter to our Macao property portfolio, which delivered a record $784.3m of adjusted property EBITDA. We remain confident that our market-leading Cotai Strip properties will meaningfully enhance the appeal of Macao and the Cotai Strip to business and leisure travellers and provide an outstanding platform for growth in the years ahead.”

The company also generated healthy financial results in Singapore, with solid growth in gaming and non-gaming revenues contributing to a strong financial performance. Rolling Chip volume increased 16.9 per cent to reach $13.79bn, while adjusted property EBITDA increased 43.3 per cent to reach $373.6m compared to $260.8m in the third quarter of 2012, which was negatively impacted by low hold.

Mr. Adelson added: “The prudent management of our cash flow, including the ability to increase the return of capital to shareholders while maintaining a strong balance sheet and ample liquidity to invest in future growth opportunities, remains a cornerstone of our strategy. I am therefore extremely pleased to announce that our recurring annual dividend will be increased to $2.00 per share, or $0.50 per quarter, for the 2014 calendar year, an increase of 42.9 per cent. Operating income in the third quarter of 2013 increased 71.3 per cent to $914.8m, compared to $534.1m in the third quarter of 2012. The increase in operating income was principally due to stronger operating results across our Macau property portfolio.”

The Venetian Macao continued to enjoy strong visitation and financial performance, delivering adjusted property EBITDA of $357.2m, an increase of 19.5 per cent compared to the third quarter of 2012.

Sands Macao’s adjusted property EBITDA increased 11.1 per cent compared to the same quarter last year to reach $89.9m. Net revenues and adjusted property EBITDA for the third quarter of 2013 at Sands Cotai Central were $736.6m and $224.3m, respectively, resulting in an EBITDA margin of 30.4 per cent.

Marina Bay Sands in Singapore was also a major driver in the record revenues, generating adjusted property EBITDA of $373.6m, an increase of 43.3 per cent compared to the third quarter of 2012.

Properties in Las Vegas didn’t fare quite as well.

Adjusted property EBITDA at The Venetian Las Vegas and The Palazzo, including the Sands Expo and Convention Center, decreased 11.3 per cent to $87.1m for the quarter. Table games drop decreased 6.4 per cent to $544.3m reflecting lower baccarat drop. Slot handle increased 2.6 per cent to $511.4m with steady slot hold percentage of 8.7 per cent.

Net revenues for Sands Bethlehem in Pennsylvania increased slightly to $122.9m while adjusted property EBITDA decreased 7.8 per cent to $29.6m for the third quarter of 2013.

RBC Capital Markets gaming analyst John Kempf said: “Las Vegas Sands reported very strong third quarter results, as continued strength in Macau offset slight weakness elsewhere. In Singapore, results were slightly lower than our expectations on the margin side, but volumes also looked healthy.”