Rob Goldstein, chairman and chief executive of Las Vegas Sands Corp (LVS), says the company was “too conservative” regarding the forecast for earnings before interest, taxation, depreciation and amortisation (EBITDA) at its Marina Bay Sands complex in Singapore.
He made the remarks on a Wednesday call to discuss the group’s third-quarter earnings. Las Vegas Sands operates casinos in Macau via its Sands China Ltd unit, and the Marina Bay Sands property via its Marina Bay Sands Pte Ltd subsidiary.
Marina Bay Sands recorded adjusted property EBITDA of US$743 million for the third quarter this year, 83.0-percent higher than in the prior-year quarter, according to the parent’s filing.
“We had forecasted Marina Bay Sands could do [EBITDA of] US$2.5 billion annually. It turns out we were too conservative: we should easily exceed that figure in 2025,” said Mr Goldstein on Wednesday.
“Marina Bay Sands is currently over US$2.1 billion of EBITDA this year with a quarter still to go,” he added.
Las Vegas Sands broke ground in July on a US$8-billion Marina Bay Sands expansion, known as MBS 2.0. Construction of the new phase will be completed by June 2030, and open in January 2031, according to corporate information.
The expansion project will feature a new 55-storey, 570-suite hotel tower. It will offer additional gaming space, as well as restaurants, retail shops, and a 15,000-seat arena.
In May, the firm announced that hotel room renovations at the three existing towers of Marina Bay Sands had been completed, meaning the property had a “full inventory” of approximately 1,850 rooms, including 775 suites.
In the three months to September 30, Marina Bay Sands generated net revenues of US$1.44 billion, up 56.3 percent year-on-year. Casino revenues at the complex were up by 79.5 percent year-on-year, to just under US$1.08 billion.
Banking group JP Morgan said in a Thursday memo that Las Vegas Sands’ third-quarter results supported its thesis “that the recent acceleration in Singapore is clearly not an anomaly, but a step-change in sustainable demand”.
That was the result of the group’s improvements to Marina Bay Sands and “growing wealth in Singapore,” wrote analysts Daniel Politzer, Samuel Nielsen, and Michael Hirsh.
“Management’s tone on the … call was the most positive in years, reflecting Las Vegas Sands’ step-change in Singapore earnings potential,” they added.
According to Las Vegas Sands’ Mr Goldstein, mass gaming and slot revenue in the third quarter was “a record US$905 million, reflecting 122-percent growth from the third quarter of 2019 and 35-percent higher than last year.”
“We are in the right place at the right time with the right product,” stated the CEO.
“Singapore is a highly desirable destination and our product is superb,” said the executive, adding that the operating performance of Marina Bay Sands was “unprecedented in the history of our industry”.
The CEO admitted that the company had “under-forecasted” the potential EBITDA performance of the Singapore complex, saying that such growth would be “very sustainable”.
Mr Goldstein stated: “If you said two years ago that we would be delivering US$700-million quarters back-to-back [in 2025], I would have said that’s very ambitious. Well, it turns out it was done easily. These last quarters came along pretty well.”
“I don’t think anyone should question the longevity and sustainability of Singapore,” said the CEO, adding that having all suites versus mostly more rooms at the property was a “very good idea”.
“I didn’t think you go from what used to be a US$1.6 billion [EBITDA] asset pre-Covid to [what] now looks like a US$2.7 billion-US$2.8 billion asset post-Covid,” observed Mr Goldstein. “So, it’s hard to forecast something that feels so powerful and right now, it feels to me like it’s got more growth to go.”
