LVS widens quarterly net loss in 2Q amid pandemic
United States-based casino group Las Vegas Sands Corp, which has operations in Macau and Singapore, said that it swung to an attributable net loss of US$820 million in the second quarter, compared to net income of US$954 million in the same period in 2019, amid the Covid-19 pandemic.
The group reported a net loss of US$51 million for the first quarter.
In the latest reporting period, its Macau unit, Sands China Ltd, reported a US$549-million net loss, compared to net income of US$511 million in the same quarter a year earlier.
The Morgan Stanley banking group said in a Wednesday memo, that the quarterly result for Sands China was “mostly in line with expectations”.
Analysts Praveen Choudhary, Gareth Leung and Thomas Allen additionally wrote that Sands China’s “daily operating cost of US$3.7 million (down 17 percent quarter-on-quarter, and down 34 percent year-on-year) is positive, in our view”.
Las Vegas Sands consolidates the net position of its Marina Bay Sands operation into the group balance sheet. Net revenues in Singapore fell 96.7 percent year-on-year in the second quarter, to US$23 million, from US$688 million in the same quarter in 2019. The casino resort in Singapore was temporarily closed from April until late June.
Net revenues at Sands China fell 97.8 percent year-on-year, to US$47 million, from just under US$2.15 billion a year earlier. That result included negative net revenue of US$23 million at the Parisian Macao, on Cotai.
Nonetheless, the group’s chairman and chief executive, Sheldon Adelson, claimed in a press release issued alongside the results: “I am pleased to say that the early stages of the recovery process from the Covid-19 pandemic in each of our markets is now under way.”
An earnings presentation issued with the results, reiterated that the Las Vegas, Nevada casino market had reopened on June 4, for some major operators, i.e., within the quarterly reporting period, following a period of closure to stem the spread of Covid-19.
The presentation also outlined that on July 1, outside the reporting period, the casino at Marina Bay Sands had reopened to Sands Rewards Club members, Paiza Club members and holders of Singapore’s annual levy pass.
Post-reporting improvements
Additionally, the U.S. parent noted that since July 15, “certain travellers returning to Guangdong province from Macau” were no longer subject to quarantine.
“Expansion of the travel bubble to more geographies and re-establishment” of China’s Individual Visit Scheme (IVS) exit visa system, enabling mainland residents to come to Macau; as well as the return of group visa programmes, “will be important for the recovery,” added the parent.
For the second quarter, Sands China’s loss on adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) was US$312 million. The Macau unit had recorded adjusted EBITDA of US$765 million a year earlier.
Sands China’s quarterly mass-market table games win was US$10 million. Mass table hold decreased 9.7 points to 13.0 percent, from 22.7 percent. Slot machine win was US$5 million.
Morgan Stanley noted of Sands China’s quarterly performance in slot play: “Slot was half of mass – usually it is one-fifth.”
Rolling chip volume on VIP table games decreased 92.2 percent, to US$1.27 billion. The rolling win percentage was -0.59 percent for the second quarter, compared to 3.42 percent in the prior-year period.
Hotel occupancy in the Macau market decreased 92.2 percentage points, to 2.5 percent. Nonetheless the firm said the average daily rate realised on those rooms that were sold, rose 5.6 percent, to US$187.
At Marina Bay Sands, the second-quarter adjusted property EBITDA loss was US$113 million, from a positive US$346 million a year earlier.
Mass table win was US$6 million. Mass table hold increased 0.2 percentage points, to 22.2 percent, from 22.0 percent. Slot win during the first quarter, was US$4 million.
VIP rolling volume in Singapore fell 98.3 percent, to US$120 million. The rolling win percentage was 1.91 percent in the second quarter, compared to 2.49 percent in the prior-year quarter.
The Singapore operation’s hotel occupancy decreased 92.2 points, to 2.5 percent, while the average daily rate reportedly grew 5.6 percent, to US$187.
Las Vegas Sands’ chairman Mr Adelson said in his commentary: “We are fortunate that our financial strength will enable us to continue to execute our previously announced capital expenditure programs in both Macau and Singapore, while continuing to pursue growth opportunities in new markets.”
Group capital expenditure in the second quarter was US$382 million, including construction, development and maintenance activities amounting to US$337 million in Macau, US$30 million in Las Vegas, and US$15 million at Marina Bay Sands.
The group had US$3.02 billion in unrestricted cash balances as of June 30. It had access to US$3.94 billion under revolving credit facilities, net of outstanding letters of credit.
As of June 30, Las Vegas Sands’ total debt outstanding, excluding finance leases, was US$13.82 billion.
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