Browse articles by topic

Covid impact leads Las Vegas Sands to $2.18bn loss in 2020


Las Vegas Sands made a loss of more than $2bn with revenue falling 73.7% to $3.61bn for 2020, as new chief executive Robert Goldstein announced the results of a year severely impacted by the novel coronavirus (Covid-19).

Casinos were still the largest contributor to revenue, but revenue from this segment was down 65.9% year-on-year to $2.27bn.

Room revenue fell 72.5% to $498m while food and beverage revenue was down 68.7% to $283m. Mall revenue fell 46.8% to $381m and convention, retail and other revenue was down 66.7% to $182m.

The decline in revenue was sharpest in Macau, where travel restrictions impeded all operators’ earnings for most of the year, meaning revenue from the special administrative region was down 80.7% to $1.71bn.

The Venetian Macau brought in $738m, but this was down 81.8% year-on-year. Revenue from the Londoner Macau – formerly Sands Cotai Central – brought in $297m, 85.5% less than Sands Cotai Central did in 2019, after rebranding in a disrupted year.

The Parisian Macau also saw a steep drop in revenue, which fell 84.3% to $259m, while the Plaza Macau and Four Seasons Hotel was more resilient, but revenue was still down 68.8% to $265m.

Las Vegas Sands made an additional $120m, down 80.8%, from its Sands Macau property, plus $28m, down 76.1%, from ferry operations to and from the region.

Because of the collapse in Macau revenue, Las Vegas Sands made more from the rest of the world in 2020. Its Marina Bay Sands resort in Singapore made $1.26bn, down 59.3%, but enough to make it the operator’s largest property for 2020 in terms of revenue. In Las Vegas, meanwhile, the operator brought in $738m, down 59.4%.

While expenses fell 47.0%, they still comfortably outstripped revenue. Resort operations alone came to $3.8bn, down 54.5% but more than all of Sands’ resorts brought in. 

The operator paid a further $168m in corporate costs, down 46.3%, plus $19m in pre-opening costs, a 44.1% decline, and $18m in development costs, 25.0% below 2019.

Sands incurred a further $1.17bn in depreciation and amortisation costs, just 0.4% less than in 2019, plus $55m in amortisation of leaseholds of land and $80m on the disposal and impairment of assets.

This led to an operating loss of $1.69bn, after a $3.70bn profit in 2019.

Las Vegas Sands made an additional $21m in interest income and $22m in other income, but these were vastly outweighed by $536m in interest expenses. As a result, its pre-tax loss came to $2.18bn, compared to a $3.77bn profit the year prior.

After taxes, the operator made a loss of $2.14bn, after having made a $3.31bn profit in 2019.

Looking only at the fourth quarter of the year, Las Vegas Sands made $1.15bn in revenue, a significant recovery from the previous two quarters but still down 67.3% year-on-year.

Casino revenue made up most of this total, at $741m, down 70.2%. Rooms brought in $140m, food and beverages $78m, malls $153m and conventions, retail and other sources $34m, all declines of more than 25%.

For the quarter, Macau operations once again made up more than half of revenue after struggles earlier in the year. However, revenue was still down 69.9% to $675m. The Ventian Macau led the way with $327m, down 64.0%, while the Plaza and Four Seasons followed with $114m, down 53.7%.

Marina Bay Sands remained the operator’s largest driver of revenue, bringing in $345m, down 59.6%. Las Vegas operations made $150m, down 68.4%.

Operating expenses totaled $1.36bn, 47.3% less than in Q4 of 2019. Resort operations made up $1.01bn of this, a 37.1% decline. 

After interest expenses, Las Vegas Sands’ pre-tax loss came to $368m, while its loss after tax was $376m.

In his comments on the results, new Las Vegas Sands chief executive and chairman Robert Goldstein focused on his predecessor, Sheldon Adelson, who died earlier this month. Goldstein – formerly chief operating officer – initially took over Adelson’s roles on an interim basis when Adelson took a medical leave of absence at the start of the month.

“Mr Adelson’s vision and leadership created Las Vegas Sands and the convention-based Integrated Resort business model that forms the bedrock of the company’s success,” Goldstein said. “His impact will live on through the company’s 50,000 team members and the iconic properties he developed around the world. 

“These last few weeks since Sheldon’s passing have been difficult for all of us, but his commitment to investing aggressively to build iconic resorts that deliver economic benefits to our host communities, the core of the company’s operating strategy, remains firmly in place. 

“I am deeply committed to continuing the execution of the strategy he created, and confident that we will deliver growth in the years ahead while honoring his legacy and realizing his vision for the creation of additional Integrated Resorts in new markets.”

Goldstein added that he was confident that Sands’ core markets would recover despite the continued effects of the pandemic.

“I am pleased to share that the recovery process from the Covid-19 pandemic continues to progress in both Macau and Singapore,” Goldstein said. “Our greatest priority as the recovery continues remains our deep commitment to supporting our team members and to helping those in need in each of our local communities of Macao, Singapore and Las Vegas. 

“We remain optimistic about the eventual recovery of travel and tourism spending across our markets. We are fortunate that our financial strength supports our previously announced capital expenditure programs in both Macau and Singapore, as well as our pursuit of growth opportunities in new markets.”