GGRAsia – Sands China posts US$423mln 3Q loss, positive EBITDA

Sands China posts US$423mln 3Q loss, positive EBITDA

Oct 21, 2021 Newsdesk Latest News, Macau, Singapore, Top of the deck

Macau casino operator Sands China Ltd recorded a net loss of US$423 million for the three months to September 30, as heightened pandemic-related restrictions had a negative impact on the group’s financial results for the quarter. That compares with a loss of US$166 million in the second quarter of 2021, but was still an improvement on the US$562-million loss a year earlier.

The company however was able to generate positive earnings before interest, taxation, depreciation and amortisation (EBITDA) for the third quarter 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$32 million in the reporting period, down from US$132 million in the preceding quarter. It was still far better than the adjusted property EBITDA loss of US$233 million for the third quarter of 2020.

The Macau casino operator saw its net revenues decline 28.0 percent quarter-on-quarter, to US$611 million in the third quarter. The result – reported under U.S. generally accepted accounting principles (GAAP) – was still a 265.9-percent improvement from the US$167 million achieved in prior-year period.

“While heightened pandemic-related restrictions impacted our financial results this quarter, we were able to generate positive EBITDA in each of our markets,” said Las Vegas Sands’ chairman and chief executive, Robert Goldstein, in prepared remarks included in the latest results.

“We remain confident in the eventual recovery in travel and tourism spending across our markets,” he added. “Demand for our offerings from customers who have been able to visit remains strong, but pandemic-related travel restrictions in both Macau and Singapore continue to limit visitation and hinder our current financial performance.”

Macau implemented stricter restrictions in early August and September following a series of new Covid-19 cases in the city. In September, authorities in the neighbouring city of Zhuhai, Guangdong province, introduced a requirement for all arrivals from Macau to undergo a 14-day compulsory quarantine. The move took effect on September 26, and was only relaxed on October 19. Zhuhai is the mainland-travel gateway to Macau for mainland China visitors.

Non-gaming a ‘brightspot’

According to brokerage JP Morgan Securities, Sands China’s aggregate gross gaming revenue (GGR) for the third quarter fell 37 percent quarter-on-quarter, “weaker” than the overall Macau market 26-percent decline in the period.

“Non-gaming was the (relative) brightspot, down only 4 percent quarter-on-quarter,” said the institution. It added that such result was driven by the group’s “retail business that continued to recover to near pre-Covid levels … on exceptionally strong demand for high-end goods and a big jump in spend-per-capita.”

In Singapore, where Las Vegas Sands operates Marina Bay Sands, net revenues fell to US$249 million in the third quarter of 2021, from US$327 million in the three months to June 30. Third-quarter revenue was down 11.4 percent in year-on-year terms.

During the reporting quarter, the casino at Marina Bay Sands was closed from July 22 to August 5, because of a cluster of Covid-19 infections in Singapore linked to the casino.

Adjusted property EBITDA at Marina Bay Sands in the third quarter stood at US$15 million, down from US$112 million in the preceding quarter, and a decline of 78.6 percent from a year ago.

The Las Vegas Sands group made an operating loss of US$316 million in the third quarter, up from US$139 million in the second quarter. The latest result compared to a loss of US$523 million a year earlier.

The group’s aggregate net revenue in the three months to September 30 was US$857 million, down from US$1.17 billion in the previous three months, but up 92.2 percent year-on-year.

Net loss from continuing operations in the third quarter of 2021 more than doubled quarter-on-quarter, to US$594 million. It was still an improvement from the US$664-million loss reported in the third quarter of 2020.