U.S.-based casino group Las Vegas Sands Corp says it will suspend the company’s dividend programme amid the negative impact from the Covid-19 pandemic. The group nonetheless said in a Friday press release outlining the group’s “strategic priorities” that it would “continue previously-announced capital expenditure programmes in both Macau and Singapore”.
Las Vegas Sands is the parent of Macau casino operator Sands China Ltd. The group also runs the Marina Bay Sands property in Singapore, via its unit Marina Bay Sands Pte Ltd.
The statement quoted the group’s chairman and chief executive, Sheldon Adelson, as saying that the company had decided to suspend its dividend programme in order to provide “maximum” options “in pursuing our strategic vision and in producing future returns”.
“A strong balance sheet is also a vital and necessary component to realising stockholder value in the decades ahead,” said Mr Adelson. “I commit to my fellow shareholders that we will revisit the suspension of the dividend at the earliest reasonable opportunity,” he added.
Las Vegas Sands last announced a dividend in January, in its fourth-quarter 2019 earnings. The group declared a US$0.79 per share dividend that was to be paid on March 26.
Las Vegas Sands’ operations in the United Stated are temporarily suspended at least until April 30, according to guidelines from the authorities in Nevada. Singapore’s two casino resorts are closed for a period of at least four weeks, until May 4.
Macau’s casinos are currently open, but with a low volume of customers due to a raft of travel and quarantine restrictions imposed by Macau and authorities in important feeder markets including mainland China and Hong Kong. The city’s casinos were closed for a 15-day period in February.
In a Friday filing, Sands China said its board decided not to recommend a final dividend for the year ended December 31, 2019. It said the decision was in light of the “current and potential material impact of the Covid-19 coronavirus pandemic on the global economy”. The company had recommended a final dividend for 2018 of HKD1.00 (US$0.127) per share.
Despite the difficult business environment, Mr Adelson said in Friday’s statement that Las Vegas Sands balance sheet’s strength would enable the group “to emerge from this pandemic with all our promising future growth opportunities fully intact”.
“We are fortunate that our financial strength will allow us to continue to execute our previously-announced capital expenditure programmes in both Macau and Singapore,” stated the CEO.
Las Vegas Sands Corp had previously announced a US$2.2 billion in investment in Macau, including rebranding the Sands Cotai Central complex as the Londoner Macao, a property themed on architecture from the United Kingdom’s capital city.
In Singapore, the group has pledged to the local government to spend SGD4.5 billion (US$3.16 billion) to expand its facilities at Marina Bay Sands, coincidental with it casino licence there – under the city’s casino duopoly – being extended until 2030.
In its own Friday filing, Sands China stated: “The company has a strong capital, funding and liquidity position and remains committed to executing its ongoing capital expenditure programmes in Macau.”
In the parent company’s statement, Mr Adelson said the impact of the Covid-19 pandemic on the group’s business had been “unprecedented”.
“I have never seen anything like it in my over seventy years in business,” he added. “Our greatest priority during this difficult time remains our deep commitment to supporting our team members and assisting each of our local communities of Macau, Singapore and Las Vegas.”
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“Asia remains the backbone of this company and our developments in Macau and Singapore are the centre of our attention”
Chairman and chief executive of casino operator Las Vegas Sands