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China – Slowdown in Macau VIP sinks Sands but mass remains strong

By - 24 October 2019

Las Vegas Sands saw its Macau revenues dip by two per cent for the three months that ended September 30 with increases in Las Vegas and Singapore seeing overall group revenue’s fall by 3.6 per cent to $3.25bn.

With Macau accounting for 65 per cent of Sands’ overall total, the seven per cent gain in Las Vegas and the 3.5 per cent increase in Singapore could reverse the overall downturn.

Las Vegas Sands’ CEO and Chairman Sheldon Adelson, speaking at the company’s quarterly financials for the first time in some time following illness, said: “While overall Macao gross gaming revenues declined for the quarter, the mass-market continues to experience robust growth. We grew our mass-gaming revenues by nine per cent over the prior year with strong growth in both mass tables and slots, and in both the premium mass and mass segments. Most importantly, our profitability continues to lead the industry, with adjusted property EBITDA margin at 35.7 per cent.”

Rob Goldstein, President and Chief Operating Officer, said: “The future of Macau is mass, and visitation continues to improve, the quarter for us was very, very positive except for the softness in the rolling segment. But our game plan as you know we said quarter-after-quarter, year-after-year, our game plan remains the same. It’s more product, we’re spending $2 billion plus at Londoner Four Seasons, quality product. The quality we’re doing at Four Seasons Londoner will surprise everybody, it surprised us actually. It’s pretty spectacular. And so, we don’t see a whole lot of changes in this quarter. It’s business as usual. It’s reinvest in the product, focus on the high-margin mass business, grow our fundamental advantage, which is more retail, more restaurant, more entertainment and most importantly more lodging.”

In Singapore, the group’s adjusted property EBITDA was US$435m, up four per cent over the prior year. Rolling volumes were strong and/or above the level of the prior year. Mass win per day remains solid. The hotel continues to enjoy near full occupancy and retail sales per square foot increased by 10 per cent. Sands’ Las Vegas operations had another good quarter with adjusted property EBITDA of US$93m, an increase of 22 per cent over the prior year.

Mr. Adelson added: “We remain enthusiastic about our future growth opportunities in Asia. Next year, we will introduce approximately two million square feet of luxurious suite accommodations on the Cotai Strip with the opening of the Grand Suites at Four Seasons Macao and The Londoner Tower Suites. Additional tourism and entertainment amenities of The Londoner Macao will debut throughout 2020 and 2021. Looking further ahead, the expansion of Marina Bay Sands in Singapore will expand our suite capacity by 40 per cent and introduce a state-of-the-art entertainment arena, both of which should contribute to growth in the future. We are also aggressively pursuing additional development opportunities in new markets, including in Japan.”

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