Las Vegas Sands‘ recovery from the Covid-19 pandemic is gaining steam, and Asia is an enormous reason why.
The world’s largest casino company on Wednesday announced it pulled in $1.12 billion in third-quarter adjusted property EBITDA, an important measure of profitability within the gambling industry. That is nearing pre-pandemic levels, off just 6% from the identical period in 2019.
Las Vegas Sands announced earnings of 55 cents per share on revenue of $2.8 billion. Earnings were in keeping with expectations, while revenue barely topped estimates, based on a survey of analysts by LSEG, formerly referred to as Refinitiv.
In Singapore, Marina Bay Sands is posting numbers which have surpassed pre-pandemic levels in gaming, retail shopping and other spending, although visitation remains to be lower. Profit margins have reached greater than 48%.
A lady rides her bicycle with the Marina Bay Sands hotel and high-rise buildings within the background in Singapore on Sept. 4, 2023.
Roslan Rahman | AFP | Getty Images
In Macao, where visitation is still off about 15% from pre-pandemic levels, Sands said its occupancy within the third quarter was 96% higher than it was before Covid lockdowns and customers are spending more per person.
Across the Macao market, mass gaming revenue reached 92% of 2019 third-quarter levels, or $5.1 billion, in response to official government numbers. Las Vegas Sands CEO Rob Goldstein predicted on the corporate’s earnings call that the destination could hit $40 billion annually within the near term.
As cashflow increases, Las Vegas Sands is laying out recent priorities for capital expenditures. It would proceed its remodel of Marina Bay Sands, leading to nearly 4 times the variety of suites, which command greater prices. In Macao, the second phase of construction begins on The Londoner, the most recent offering within the portfolio.
Las Vegas Sands also announced a $2 billion share repurchase plan through 2025.
Signage for the Sands Cotai Central casino resort, operated by Sands China Ltd., a unit of Las Vegas Sands, in Macau, China, on Jan. 17, 2019.
Paul Yeung | Bloomberg | Getty Images
Las Vegas Sands President Patrick Dumont indicated the corporate has shifted the way it desires to return capital to shareholders, relying more on buybacks than on the dividends his late father-in-law Sheldon Adelson embraced so publicly every earnings call.
Goldstein identified that the shares are trading as if Covid lockdowns are still in place. So when the stock is reasonable, there are buying opportunities, especially when Sands is sitting on $5.6 billion in money.
When Bank of America analyst Shaun Kelley commented on the earnings call, “You are probably probably the most under-leveraged gaming company I’ve ever covered,” Dumont said it has been a five-year process to rework the corporate to be investment grade.
“It gives us access to the biggest, most liquid debt market on this planet, since it’s a really efficient class of capital,” he said.
In a reference to the corporate’s efforts to secure a gaming license in Recent York, Dumont said, “Having this investment-grade balance sheet also helps us in recent jurisdictions, because now we have the financial capability to execute on projects we propose.”
Las Vegas Sands’ Recent York proposal is for a $5 billion casino resort in Nassau County on Long Island. Sands’ competitors include MGM, which is searching for an expanded license for its existing property in Yonkers; Resorts World, which desires to expand in Queens; Caesars and Wynn, that are each searching for Manhattan sites; and Bally’s, which desires to put a casino on a former Trump property within the Bronx.
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