GGRAsia – 2Q EBITDA at Sands China, MBS soars, LVS resumes dividend

2Q EBITDA at Sands China, MBS soars, LVS resumes dividend

Jul 20, 2023 Newsdesk Latest News, Macau, Singapore, Top of the deck

Macau casino operator Sands China Ltd achieved adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$541 million in the second quarter of 2023. That compared with an EBITDA loss of US$110 million a year earlier, and a positive figure of US$398 million in the first three months of 2023.

Net income for Sands China in the April to June period was US$187 million, compared to net losses of US$422 million in the prior-year period and of US$10 million in the first three months of 2023, according to a Wednesday filing from its United States-based parent, Las Vegas Sands Corp.

Sands China’s second-quarter net revenue rose by 340.2 percent year-on-year, to US$1.62 billion. Such revenue was also up from US$1.28 billion in first-quarter 2023.

At Las Vegas Sands’ other ongoing operation – Marina Bay Sands in Singapore – quarterly adjusted property EBITDA reached US$432 million, up 35.4 percent in year-on-year terms. The EBITDA result was also an improvement on the US$394 million property EBITDA recorded in the first quarter this year.

Net revenues at Marina Bay Sands stood at US$925 million in the three months to June 30, compared to US$679 million a year earlier. The firm had posted net revenues of US$848 million for the first quarter of 2023.

“We were pleased to see the robust recovery in travel and tourism spending underway in both Macau and Singapore progress during the quarter,” said Robert Goldstein, chairman and chief executive of Las Vegas Sands, in a press release on Wednesday discussing the firm’s latest quarterly results.

He added: “We remain enthusiastic about the opportunity to welcome more guests back to our properties throughout the remainder of 2023 and in the years ahead.”

Las Vegas Sands also announced on Wednesday it would resume its quarterly dividend programme, at US$0.20 per common share. The next dividend will be paid on August 16 to Las Vegas Sands stockholders of record on August 8.

“Our financial strength supports our ongoing investment and capital expenditure programmes in both Macau and Singapore, our pursuit of growth opportunities in new markets, and the return of capital to stockholders,” said Mr Goldstein in comments featured in the press release. “We are very pleased to reinstate our quarterly dividend this quarter.”

The Las Vegas Sands group posted net revenue of US$2.54 billion for the second quarter, compared to US$1.05 billion in the prior-year period. Net income from continuing operations was US$368 million, compared to a net loss from continuing operations of US$414 million in the second quarter of 2022.

Margin improvement

In a Thursday memo, Jefferies Group LLC analyst Andrew Lee said Sands China’s second-quarter earnings recovery “was broadly in line” with market expectations, benefitting from “margins improving”. He added that EBITDA margin for the period “improved to 33.2 percent (from first quarter 2023′s 31.1 percent), which is close to peak quarter margin of 36.8 percent in the first quarter of 2019.”

Mr Lee said the margin improvement was linked to Sands China’s “shift away from lower-margin VIP segment and faster recovery of non-gaming”. Non-rolling table win and retail sales for the second quarter were 84 percent and 93 percent respectively of second quarter 2019 levels, “but rolling was only 33 percent” compared to the pre-pandemic period, he stated.

In Wednesday’s filing, the parent company said there was an “ongoing recovery now underway in all gaming and non-gaming segments” in Macau.

Sands China’s non-rolling table win in the mass market was US$1.17 billion in the second quarter of 2023, compared to US$911 million a quarter earlier, said the firm. Slot win reached US$151 million, up from US$118 million in the first three months of 2023, and circa 93 percent of second-quarter 2019 levels.

Rolling win in the VIP segment stood at US$182 million in the second quarter of 2023, up from US$155 million in the preceding quarter.

Sands China runs a number of Cotai resorts, including: the Venetian Macao, the Parisian Macao (pictured), and the Londoner Macao. It also operates casino-hotel Sands Macao on the peninsula.

The firm held a formal launch event in May for The Londoner Macao, including an opening for its 6,000-seat arena. The resort – which was already in use prior to May’s launch event – represents the rebranding and major reconfiguring of a Cotai venue that used to be known as Sands Cotai Central. It now features the architecture of the Palace of Westminster in London, including the clock tower popularly known as Big Ben.

Capital expenditures for the Las Vegas Sands group during the second quarter totalled US$196 million. That included “construction, development and maintenance activities” of US$144 million at Marina Bay Sands, and US$42 million in Macau.

“In Singapore, Marina Bay Sands again delivered outstanding levels of performance in all segments, with mass gaming revenue reaching another record result,” Mr Goldstein said. “We remain energised by the opportunity to introduce our new suite product and elevated service offerings to more customers as airlift capacity continues to improve and the recovery in travel and tourism spending from China and the wider region continues.”

In March, Las Vegas Sands said it had been authorised by Singapore’s authorities to delay by 12 months the deadline to start construction work for an extension of Marina Bay Sands. It was the second 12-month deadline extension granted to the firm regarding the start of construction for the expansion.

The company is currently carrying out a separate, unrelated US$1.0-billion “suite renovation programme” for the existing accommodation at Marina Bay Sands. According to the firm, upon completion of the scheme in December 2023, the property will feature approximately 400 “premium suites”, compared to approximately 150 in 2019.

“As of June 30, 2023, we have introduced approximately 1,100 reimagined rooms, of which approximately 250 are luxurious new suites,” the firm said in an investor presentation published on Wednesday.