Operator News

China – Macau returns to 2014 levels of business for Sands

By Phil - 26 January 2018

Las Vegas Sands said a ‘robust recovery in Macau, where it enjoyed its best quarter for four years, helped it to almost double its profits in the three months up to December.

Profit increased to $1.2bn compared to $509m in the period a year ago with revenues boosted by 12 per cent from a year ago to $3.44bn, smashing analysts’ forecasts for $3.3bn.

The company’s Macau operations increased their revenues by 13 per cent increase to $2.1bn.

Sheldon Adelson, Sands Chairman and CEO, said: “It feels like we have now returned to 2014 and the period prior to that. I’m very excited about the growth that we’re experiencing in Macao. Our Macao operations produced its best quarter since quarter three 2014 with adjusted EBITDA reaching $731m. Hold-normalized EBITDA came in at $758m representing growth of 30 per cent over the prior year. Macao’s mass market growth accelerated during the quarter from nine per cent in quarter three to an estimated 18 per cent in quarter four. We again outperformed the market in mass gaming growth as we have throughout 2017.
Sands China’s Mass table games win increased 26.9 per cent, outpacing the estimated growth in the market overall and contributing to Sand’s highest Mass gaming win since the first quarter of 2014.

Mr. Adelson added: “That strong gaming performance, coupled with higher hotel occupancy and retail mall revenues, helped drive an increase in adjusted property EBITDA of 19.8 per cent, to $731m, our best quarterly result in Macao since the third quarter of 2014. We are extremely pleased with our operating momentum in Macao and remain confident that our Cotai Strip property portfolio will continue to deliver important benefits to Macao in the form of economic diversification, greater numbers of business and leisure travelers, and a superior platform for growth in the years ahead.”
He highlighted the scale and range of the company’s hotel suite inventory, the diversity of its non-gaming offering, especially in retail and entertainment and the unique benefit of inter-connectivity between its Cotai properties as being key.

“These advantages allow us to attract more overnight visitors than any other operator, as well as increase their length of stay. As a result, we grew by an exceptional 52 per cent in premiums mass when compared to the prior year. We achieved hotel occupancy of 94 per cent in the fourth quarter despite having added approximately 3,000 rooms to our inventory just over a year ago with the opening in The Parisian. At over 1 million occupier room nights in the fourth quarter, this was an all-time quarterly record for our Macao hotels. Our MICE business has gone from strength to strength growing by 44 per cent year-on-year to just under 290,000 room nights in 2017.”

The company now plans to spend $1.1bn over the next two years in expanding, renovating and reframing Sands Cotai Central into the Londoner, as well as completing the two towers at the Four Seasons.

“The Londoner has tremendous potential as the third landmark must-see destination,” Mr Adelson explained. “Upon its completion, The Londoner will accommodate more overnight guests than The Venetian and The Parisian combined. The Londoner will offer great potential for visitation and growth as a stand-alone integrated resort, but will also provide synergies with The Venetian Macao and The Parisian. Having three iconic must-see European-themed destination resorts with a broad range of amenities will strengthen our marketing and customer service capabilities and position us to grow faster than the Macao market in every segment on both, the top line and the bottom line in the years ahead.”

Mr Adelson was also thrilled by the performance of Marina Bay Sands in Singapore. It again delivered outstanding financial results during the quarter with adjusted property EBITDA expanding 24.6 per cent to reach $456m.

“We are pleased to have established Marina Bay Sands as a reference site for other cities and countries that are considering harnessing the economic power and direct contributions to tourism, employment and GDP growth that are gained through our unique convention-based Integrated Resort business model,” he said. “The quarter was marked by a strong VIP and slot revenue growth. Normalized EBITDA margins increased by 190 basis points versus the prior year reaching 52.5% for the fourth quarter supported by solid cost controls and efficiency gains. 2017 was a record year for Marina Bay Sands and adjusted property EBITDA when measured in Singapore dollars. Because of its business in leisure tourism deals and strong positive impact on the local economy, Marina Bay Sands continues to serve as a powerful reference site to emerging jurisdictions that are considering large-scale integrated resort developments.”

Growth in Sands domestics markets was more modest. Revenue at The Venetian Las Vegas and The Palazzo, including the Sands Expo and Convention Center, increased 2.4 per cent to $422m, while adjusted property EBITDA increased 2.7 per cent to $114m.

Revenue at Sands Bethlehem increased by 2.2 per cent to $142m, while adjusted property EBITDA was $34m for the quarter.