GGRAsia – Sands China 4Q EBITDA loss down q-o-q, rev up 72pct

Sands China 4Q EBITDA loss down q-o-q, rev up 72pct

Jan 26, 2023 Newsdesk Latest News, Macau, Singapore, Top of the deck

The quarterly loss on adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) for Macau casino operator Sands China Ltd narrowed sequentially in the three months to December, to US$51 million, compared to an EBITDA loss of US$152 million in the third quarter.

Net revenue for Sands China increased 72.1 percent quarter-on-quarter, to US$444 million, from US$258 million, according to a Wednesday filing from its United States-based parent, Las Vegas Sands Corp.

Fourth-quarter net loss for Sands China was US$348 million, down from US$472 million in the preceding quarter.

Mass-market chip drop at the group’s Cotai flagship, the Venetian Macao, was US$491 million in the fourth quarter, up 68.2 percent on the US$292 million in the third quarter.

Nonetheless, amid significant relaxation of anti-Covid-19 measures only occurring in Macau and mainland China at the start of January, “travel restrictions” and “reduced” visitor volume had “continued to impact our financial performance” during the fourth quarter, said Robert Goldstein, chairman and chief executive of the parent.

Though he added in remarks cited in a group press release accompanying the results: “We remain confident in a robust recovery in travel and tourism spending across our markets and deeply enthusiastic about the opportunity to welcome more guests back to our properties throughout 2023 and in the years ahead.”

Sands China’s fourth-quarter loss on adjusted EBITDA “was actually better than feared,” said a Thursday note from JP Morgan Securities (Asia Pacific) Ltd. Its analyst DS Kim mentioned the institution had been braced for negative EBITDA amounting to as much as US$90 million.

Andrew Lee, a Hong Kong-based analyst at Jefferies Group LLC, said in a Wednesday note that the “first stage of recovery was under way” at Sands China.

For full-year 2022, Sands China reported revenue of just below US$1.63 billion, down from nearly US$2.90 billion in 2021. Adjusted property EBITDA stood at US$732 million in 2022, down from US$786 million a year earlier. Net loss for Sands China was US$1.58 billion in 2022, compared to US$1.05 billion in 2021.

At Las Vegas Sands’ other ongoing operation – Marina Bay Sands in Singapore – quarterly net revenue was down 9.8 percent sequentially in the three months to December 31, at US$682 million, compared to US$756 million in the third quarter. Judged year-on-year, such Singapore net revenue rose 85.3 percent, from the US$368 million a year earlier.

“We were pleased to see the robust recovery continue at Marina Bay Sands during the quarter, with the property delivering record levels of performance in both mass gaming and retail revenue,” stated group CEO Mr Goldstein.

Mass-market chip drop in Singapore was US$1.45 billion in the fourth quarter, compared to just under US$1.26 billion in the third quarter.

Fourth-quarter adjusted property EBITDA in Singapore was down 20.4 percent sequentially, at US$273 million, versus US$343 million in the third quarter. Nonetheless, fourth-quarter 2022 EBITDA was up 54.2 percent on the US$177 million in the fourth quarter last year.

Group-wide, Las Vegas Sands reported a fourth-quarter net loss of US$169 million, versus a net loss of US$123 million in the same quarter of 2021.

Nonetheless, the parent had a full-year 2022 profit of just over US$1.83 billion, supported by a net gain after tax, of nearly US$2.90 billion, on disposal of its operation in Las Vegas, Nevada, in the U.S.

Payment of dividends remained suspended for the 12-month period up to and including December 31, according to an earnings deck from the parent.

As of December 31, 2022, total debt outstanding, excluding finance leases and financed purchases, was US$15.95 billion. Unrestricted cash balances as of that date were US$6.31 billion.

The group said it had access to US$2.48 billion available for borrowing under its U.S., Sands China, and Singapore revolving credit facilities, net of outstanding letters of credit.

Capital expenditures during the fourth quarter totalled US$147 million, including construction, development and maintenance activities of US$93 million at Marina Bay Sands, US$44 million in Macau, and US$10 million under the heading “corporate and other”.