Rob Goldstein, chairman and chief executive of international casino operator Las Vegas Sands Corp, says the group expects its Marina Bay Sands integrated resort in Singapore to achieve annual earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$2 billion “in the next couple of years”.
“We think that Singapore is in a unique place,” said Mr Goldstein (pictured in a file photo), adding that the company should be able to “easily achieve” 2019 levels in terms of EBITDA, i.e., trading conditions before the onset of the Covid-19 pandemic.
The forecast was made in a Wednesday conference call with investment analysts following the firm’s announcement of its third quarter results.
“Singapore is going to grow for a couple of reasons: the destination is getting more powerful than ever; our building is getting better than ever; and I think that when you see a rebound in China and the rest of Asia, [annual EBITDA of] US$1.6 billion will look very small,” stated the CEO. “I think we can keep growing to US$2 billion in the next couple of years if we get it right and the market fully recovers.”
He added: “So, as much as we like the numbers currently, we think there are much better days ahead for Singapore.”
Las Vegas Sands said the recovery of Marina Bay Sands continued during the third quarter. The property’s adjusted EBITDA reached US$343 million in the three months to September 30, up 7.5 percent sequentially, and an increase from US$15 million in the prior-year period, said the group in its earnings announcement in the United States on Wednesday.
Mr Goldstein said that following the relaxation of travel-related restrictions in Singapore, Marina Bay Sands saw an increase in customer numbers from “many” of its source markets. “We would like to have a lot more rooms in Singapore, as demand keeps lifting,” he added.
The firm is engaged in a US$1-billion upgrade of Marina Bay Sands, to be completed in phases over 2022 and 2023.
On Wednesday, Patrick Dumont, Las Vegas Sands president and chief operating officer, said Marina Bay Sands would have between “300 and 500 keys out of circulation across the next five quarters”, as part of the renovation of the property. “The two towers will be fully ready by Chinese New Year [period] in 2024, and likely by the end of 2023,” he added.
Singapore’s bullish view was in contrast with the outlook for Macau, with the group CEO stating that the operating environment in the latter market “remains difficult”.
But Mr Goldstein added that Las Vegas Sands had “great confidence in Macau’s tourism recovery and its long-term growth prospects.” He noted that in periods that travel restrictions had been relaxed in Macau, customer demand and spending “had proven resilient at the premium mass segment and retail perspective”.
Grant Chum Kwan Lock, chief operating officer of the firm’s Macau unit Sands China Ltd, mentioned on the call the recent announcement of travel easing steps with mainland China.
In September, Macau’s Chief Executive had stated that from late October or early November, Macau was likely to see the return of electronically-issued exit visas for mainland Chinese residents to come to Macau, including for individual visit scheme (IVS) permits, as well as group tours from the mainland. Priority would be given to resumption of tours involving residents from the provinces of Guangdong, Zhejiang, Jiangsu and Fujian, and the city of Shanghai.
Mr Chum stated that the announcement by the local authorities would “be a very positive signal for a gradual recovery in visitor numbers, especially for these key places” in the mainland.
The past few months in Macau had been “relatively impacted” by Covid-19 cases in a number of mainland provinces, noted Mr Chum.
He added: “What we are seeing right now in Macau is predominantly [visitors] coming from Guangdong province. Hopefully, as we get out further in the fourth quarter, we start to see a more well-rounded visitation mix towards the end of the year.”
Asked if it would be possible to turn EBITDA positive or even break even in its Macau operations in the fourth quarter, the group’s management said that given all the uncertainties: “We don’t know.”
Las Vegas Sands reported negative adjusted EBITDA in its Macau operations to the tune of US$152 million in the third quarter, compared to negative EBITDA of US$110 million in the preceding quarter.
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