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China – Sands to surge past 2019 EBITDA levels by next year

By - 17 February 2022

Brokerage firm Sanford C. Bernstein believes Macau operator Sands China will surpass its 2019 EBITDA of US$3.3bn next year with EBITDA reaching US$5bn by 2025.

Bernstein analyst Vitaly Umansky said: “Sands China is the largest gaming investor in Macau, having invested US$14.5bn over the last 20 years and holding over 30 per cent market share. With the significant historical investment limited capex commitment over the next few years, we expect Sands China’s Net debt/EBITDA to drop back to 2019 levels by 2024 and restart dividends.

“The long-term fundamentals in Macau and Sands’ positioning are positive, our thesis on secular growth in Mass is intact and Sands is well placed to succeed in the premium mass and mass driven market.”

In Singapore, it is tipping Marina Bay Sands to recover to 2019 levels by 2024 with EBITDA of US$1.74bn by 2024 and US$1.9bn by 2025.

“Marina Bay Sands was the single most profitable casino asset globally in 2019 and generated the highest EBITDA both in dollars and margin, and can revert to those levels over the next two years as Singapore travel resumes,” he said.

“We expect MBS to maintain its lucrative positioning in the future, especially long-term on the back of its large-scale renovation and expansion. While much will depend on the timing of recovery in Macau and Singapore (largely driven by the timing of reopening of travel), over the longer term, we expect recovery and growth in both markets.”

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