Las Vegas Sands Q3 Results Supported by Singapore, Hindered by Macau

Posted on: October 19, 2022, 05:04h. 

Last updated on: October 19, 2022, 05:31h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Third-quarter results for Las Vegas Sands (NYSE: LVS) are a repeat for investors: Strength in Singapore while headwinds remained in Macau.

Las Vegas Sands
Marina Bay Sands in Singapore. The venue was a bright spot for Las Vegas Sands in the third quarter. (Image: CNN)

After the close of US markets Wednesday, the gaming company reported a loss of 27 cents a share on sales of $1 billion for the September quarter. Analysts expected a loss of 25 cents on revenue of $1.01 billion. The stock is lower by 1% in the after-hours session after declining by 0.70% during traditional trading hours.

Sands slashed operating losses to $177 million from $316 million a year earlier. But CEO Rob Goldstein acknowledged travel restrictions in Macau — the company’s largest operating market — weighed on third-quarter results. However, he sounded an optimistic tone about Sands’ long-term outlook in that market and Singapore.

We remain enthusiastic about the opportunity to welcome more guests back to our properties as greater volumes of visitors are able to travel to both Singapore and Macau,” he said in a statement. “We remain confident in the recovery of travel and tourism spending across our markets. Demand from customers who have been able to visit remains robust.

Consolidated adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) jumped to $191 million in the July through September period, up from $47 million a year earlier.

Macau Risk Still Looms Large

There’s still ample uncertainty in Macau — Sands’ largest operating market — tied to concession renewal and reopening risk.

Speaking at the National People’s Congress earlier this week, Chinese President Xi Jinping signaled support for the country’s ongoing zero-COVID policy. The effects of that policy are palpable for Macau operators. Sands, which runs five integrated resorts there, posted adjusted property EBITDA of -$152 million in the third quarter in the special administrative region (SAR).

Still, there’s some feeling  among analysts that Beijing realizes it can’t keep Macau locked down forever simply to ward off COVID-19.

Sands is the first of the major gaming companies to deliver  third-quarter results, and it’s likely that as the other reports trickle in, operators with Macau exposure will reveal similar commentary.

Singapore Strong, Financial Update

Marina Bay Sands in Singapore carried the day for LVS in the third quarter, delivering $343 million in adjusted property EBITDA. Marina Bay Sands is one of just two gaming venues in the city-state. The other is Genting Singapore’s Resorts World Sentosa. The pair enjoy long-term duopoly protection from the local government.

The company spent $108 million enhancing that venue in the September quarter, while allocating $48 million for related costs at its Macau properties.

As of Sept. 30, Las Vegas Sands has $5.84 billion in cash and access to $2.95 billion in credit revolvers. Debt increased to $15.27 billion during the quarter.