Macau casino operator Sands China Ltd reported a net loss of US$245 million in the fourth quarter of 2021, an improvement on the US$423 million reported in the previous quarter. The result compares with a loss of US$246 million a year earlier.
The company however was able to generate positive earnings before interest, taxation, depreciation and amortisation (EBITDA) for the last quarter of 2021, according to an earnings release published on Wednesday by its parent firm, United States-based Las Vegas Sands Corp.
Sands China’s adjusted property EBITDA stood at US$74 million in the reporting period, up from US$32 million in the preceding quarter. It was also better than the adjusted property EBITDA of US$47 million for the fourth quarter of 2020.
A Thursday note from analyst Andrew Lee at brokerage Jefferies LLC, said quarterly EBITDA amongst Sands China’s different properties “sequentially improved, except Parisian [Macao] due to negative VIP win-rate.”
The Macau casino firm saw its net revenues rise 5.4 percent quarter-on-quarter, to US$649 million in the fourth quarter. But the result – reported under U.S. generally accepted accounting principles (GAAP) – was still a 3.9-percent decline from the US$675 million achieved in the prior-year period.
Las Vegas Sands chairman and chief executive, Robert Goldstein, said in prepared remarks, issued with the latest results, that while pandemic-related travel restrictions “continue to impact” the group’s financial performance, the company “again generated positive EBITDA in each” of the markets it operates.
He added: “We remain confident in the eventual recovery in travel and tourism spending across our markets and enthusiastic about the opportunity to welcome more guests back to our properties in 2022 and the years ahead.”
The parent company said in a separate presentation that the Sands China property portfolio “continues to be impacted by travel restrictions related to the Covid-19 pandemic, which have meaningfully reduced visitation to Macau.”
Currently, only tourist source markets in a majority of places in mainland China have a quarantine-free travel bubble with Macau. But parts of Guangdong province are still on Macau’s medium-risk list and people coming from those places must undergo special anti-Covid-19 measures. Visitors arriving to Macau from the neighbouring city of Zhuhai are required to hold a nucleic acid test certificate issued within 24 hours proving they are ‘negative’ for the virus.
Growing market share
In the mass-market segment, the Macau unit recorded non-rolling table win of US$431 million in the fourth quarter, up from US$381 million in the previous quarter. The result was still only 29 percent of the fourth-quarter 2019 levels, i.e., before the onset of the pandemic. Slot-machine revenue for the last quarter of 2021 was US$39 million, an improvement from the US$33 million recorded in the preceding three months.
Rolling volume in the VIP segment stood at US$2.3 billion in the three months to December 31, down from US$2.7 billion in the previous quarter. The VIP hold rate was 2.27 percent, down from 2.96 percent in the third quarter.
Brokerage Sanford C. Bernstein Ltd said in Thursday memo that Sands China’s saw an improvement in its gross gaming revenue market share in fourth quarter 2021, but “still lower” than in the first two quarters of the year.
“Management is positive about the solid Macau premium business (gaming and retail), and … remains bullish on Macau market,” added analyst Vitaly Umansky.
For full-year 2021, Sands China net revenues rose 70.4 percent year-on-year, to US$2.87 billion. Net loss was US$1.05 billion in 2021, compared to US$1.52 billion in 2020. Adjusted property EBITDA stood at US$338 million, compared to a negative figure of US$431 million in 2020.
In Singapore, where Las Vegas Sands operates Marina Bay Sands, pandemic-related travel restrictions and social-distancing measures remain in place, said the company. “As a result of those measures, our property operated at reduced capacity throughout the [fourth] quarter,” it added.
Marina Bay Sands’ net revenues rose to US$368 million in the last quarter of 2021, up from US$249 million in the third quarter, and from US$345 million a year earlier. Adjusted property EBITDA at Marina Bay Sands stood at US$177 million, a sharp increase from the US$15 million figure posted in the third quarter. It was also up from the US$144 million recorded a year earlier.
Las Vegas Sands said on Wednesday it had started a US$1 billion “renovation project” of hotel accommodation at Marina Bay Sands resort.
For full-year 2021, Las Vegas Sands’ group-wide revenues grew by 13.6 percent year-on-year, to US$4.92 billion. The parent company made a net loss of US$961 million, compared to a loss of US$1.69 billion in 2020.
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Managing partner at IGamiX Management and Consulting