Las Vegas Sands Corp (LVS) says it has started a US$1-billion “renovation project” of hotel accommodation at its Marina Bay Sands casino resort (pictured) in Singapore. The information was given by Robert Goldstein, the group’s chairman and chief executive, on its fourth-quarter earnings call on Wednesday.
“We have embarked on a US$1-billion renovation project at MBS that will introduce luxurious new suite product into the resort,” Mr Goldstein told analysts. The programme will “significantly enhance our appeal to premium customers,” he added.
A presentation deck released with the latest earnings, clarified that the hotel renovation project was separate from the 2019 pledge Las Vegas Sands made to the Singapore government, to spend SGD4.5 billion (US$3.3 billion) on expansion of Marina Bay Sands. The pledge coincided with an extension until 2030 of the group’s Singapore casino rights.
The same presentation materials released on Wednesday mentioned a completion date for the expansion work as 2026. The group’s third-quarter earnings presentation deck had mentioned such work would in likelihood finish in 2025.
Singapore’s Minister of State for Trade and Industry, Alvin Tan Sheng Hui, said earlier this month it was still unclear to what extent the expansion of the city’s two integrated resorts would be delayed as a result of disruptions to the construction industry wrought by the Covid-19 pandemic.
A Thursday note from Vitaly Umansky, an analyst at brokerage Sanford C. Bernstein Ltd, stated regarding Singapore: “An additional US$1 billion in capital expenditure over 2022-2023 is being implemented – suite expansion, room upgrades – on top of the original US$3.3 billion planned for expansion” for Marina Bay Sands.
He added: “Both investments should yield good returns upon completion.”
In March this year, the annual tax rate on mass casino gross gaming revenue (GGR) in Singapore will go from a flat rate of 15 percent to a rate of 18 percent for the first SGD3.1 billion of GGR collected by the casino operator. Mass GGR in excess of SGD3.1 billion will be taxed at a rate of 22 percent.
Premium – or VIP – GGR is currently taxed at a flat rate of 5 percent in Singapore. According to the new tiered model, the first SGD2.4 billion of GGR will be taxed at a rate of 8 percent; premium GGR over that figure will be taxed at 12 percent.
Patrick Dumont, president and chief operating officer of Las Vegas Sands, was asked during the conference call about the Singapore tax changes, and noted there was nothing additional to what had already been publicly disclosed.
Dividends, Macau gaming bill
Mr Dumont was also quizzed on the call about when the group might restore its policy of issuing dividends. He said: “The dividend needs to return on a stable long-term basis, and that’s something we’ll look to do when cash flows return, and we get out of pandemic operations.”
Las Vegas Sands noted in its latest presentation deck, it is expecting to receive cash from the US$6.25-billion sale of its Las Vegas, Nevada properties, and anticipates that the relevant transactions will be completed in the first quarter this year.
As of December 31, 2021, the group’s total debt outstanding, excluding finance leases and financed purchases, was US$14.77 billion, according to its fourth-quarter results.
In other comments, Grant Chum, chief operating officer (COO) at Las Vegas Sands’ Macau unit, Sands China Ltd, said that the local authorities’ management of Covid-19 risk meant that it was hard to make predictions on timing and pace of Macau market recovery.
In common with Macau’s five other licensees, Sands China’s Macau gaming rights expire on June 26 this year. A number of investment analysts has said they expect Sands China and the other incumbents to see their rights refreshed.
Mr Chum was asked on the fourth-quarter call about Macau’s draft bill on amendment of the city’s gaming law, and what impact its provisions – including a cap on table allocation and minimum GGR levels for tables and slots – might have on operations.
The Sands China COO stated: “Amendment to the gaming law is still a work in progress. It’s still working its way through the legislature.”
He added: “We need to wait for further details, in terms of the finer form that the amendments will take, and there will be additional regulatory measures that will be potentially issued thereafter.”
Mr Chum further noted: “We have always efficiently used our table allocation and in general we welcome the direction of linking table allocation with productivity. The specifics are yet to be outlined.”
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