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China – Macau’s woes slice 26 per cent from Las Vegas Sands’ earnings

By - 27 July 2015

The continuing decline of the Macau casino sector has hit Las Vegas Sands hard with its second-quarter earnings in China falling by 26 per cent to $1.77bn.

Net revenue for the second quarter of 2015 decreased 19.4 per cent to $2.92bn, compared to $3.62bn in the second quarter of 2014. Overall, profit came in at $469.2m down from $671.4m.

Sheldon Adelson, Chairman and CEO, said: “While the operating environment in Macau, particularly in the high-end gaming segments, remained challenging during the quarter, our focus on the higher margin mass and non-gaming segments and the geographic diversification of our cash flows allowed us to again deliver in excess of one billion U.S. dollars of Adjusted Property EBITDA during the quarter and weather this cyclical downturn better than the industry overall. Despite the current headwinds in the Macao market, we remain sharply focused on the consistent execution of our global growth strategy, which leverages the power of our unique convention-based Integrated Resort business model.

“Our convention-based Integrated Resort business model appeals to the broadest set of customers, generates the most diversified set of cash flows, and delivers the industry’s highest revenue and profit from non-gaming segments while bringing unsurpassed economic and diversification benefits to the regions in which we operate. We remain confident in our ability to both further extend our global leadership position and deliver strong growth in the future.

“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.”

Mr. Adelson added: “In Macau, we welcomed more than 16m visits to our Macau property portfolio and delivered strong growth in the high-margin retail mall business. Notwithstanding a challenging environment in the VIP and premium mass gaming segments, we delivered $559.8 million in adjusted property EBITDA across our Macau property portfolio in the second quarter. We remain confident that our market-leading Cotai Strip properties, which will be complemented in the future by The Parisian Macao and the St. Regis tower at Sands Cotai Central, will continue to provide the economic benefits of diversification to Macao, help attract greater numbers of business and leisure travellers and provide an outstanding and diversified platform for growth in the years ahead.”

In Singapore, Marina Bay Sands generated record mass gaming win-per-day in local currency terms in the second quarter of 2015. Adjusted property EBITDA decreased to $363.3 million in the current quarter as healthy growth in mass gaming win was offset by a decrease in Rolling Chip win (partially due to a lower Rolling Chip win percentage compared to the prior-year quarter) and the negative impact of the stronger U.S. dollar. Hold-normalized adjusted property EBITDA increased 6.1 per cent on a constant-currency basis.

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