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Sands begins recovery in Q3, but revenue still down 82%


Las Vegas Sands showed signs of recovery from the second quarter’s novel coronavirus (Covid-19) disruption, but revenue was down 82.0% and third quarter losses came to $731m.

Of the operator’s $586m in revenue generated in the three months to 30 September, $340m came from casinos, 85.4% less than in 2019.

Malls, the most resilient revenue stream, became Sands’ second-largest moneymaker for the quarter, bringing in $83m, down 52.6%. A further $79m came from hotel rooms, an 82.7% decline, while food and beverage revenue declined 72.9% to $54m and convention, retail and other revenue was down 71.6% at $33m.

The continuing struggles of the gaming and tourism markets in Macau meant that Marina Bay Sands in Singapore became Las Vegas Sands’ largest source of revenue, bringing in $281m, down 35.4%. 

All of Sands’ Macau operations, meanwhile, saw combined revenue drop by 91.9% to just $171m, but this was still better than the Macau market as a whole performed during the quarter. Revenue for the Chinese Special Administrative Region dropped by 94.5% year-on-year in both July and August, before posting a 90.0% decline for September

The Venetian Macau was Sands’ largest source of revenue on the island, but revenue fell 92.0% to $68m. The Parisian Macau followed, bringing in $40m, down 89.5%, while the Plaza Macau and Four Seasons Hotel brought in $25m, down 73.9%.

Sands Cotai Central was the property most affected by the pandemic, as revenue fell 95.5% to just $22m, while revenue from Sands Macau fell 93.0% to only $12m. Ferry operations between Hong Kong or Guangzhou and Macau came to $4m, down 84.6%.

Revenue from Sands’ Las Vegas properties was down 62.6% to $152m.

The business’s operating expenses, however, came to $1.20bn, down 49.1%. The vast majority of these costs were in resort operations, where costs declined 59.9% to $791m.

Sands’ loss before interest, tax, depreciation and amortisation (EBITDA) came to $203m, compared to a $1.28bn profit in 2019. Marina Bay was the only property to post positive EBITDA – of $70m – during the quarter.

The operator noted that extremely unfavourable win rates in Las Vegas played a part in the significant EBITDA loss, and that at normalised hold rates this totalled $184m, compared to a $1.26bn profit in 2019.

The business paid a further $33m in corporate costs, down 44.1%, $5m in pre-opening costs, down 44.4% and $3m in development costs, down 25.0%.

In addition, the business incurred $292m in depreciation and amortisation costs, up 3.2%, $14m in amortisation costs of leaseholds of land, a total that remained steady year-on-year, and $58m for the disposal or impairment of assets, up 427.3%.

This resulted in an operating loss of $610m, compared to an $899m profit in 2019.

In addition, Sands made $3m in interest income, down 85.0%, but interest expenses held steady at $137m. It paid a further $4m in other expenses.

This meant Sands’ pre-tax loss was $748m, close to the amount of pre-tax profit the business made in Q3 of 2019 ($751m).

After a $17m income tax benefit, Las Vegas Sands’ net loss came to $731m, compared to a $669m profit in 2019.

After taking profits and losses owed to noncontrolling interests into account, a $565m loss was attributable to Sands shareholders, while in 2019 a $533m profit had been attributable to shareholders.

Following a Q2 in which Sands posted revenue of just $98m and lost almost $1bn, the operator’s chairman and chief executive Sheldon Adelson he was pleased to see a significant improvement.

“I am pleased to say the recovery process from the Covid-19 pandemic continues to progress in each of our markets,” Adelson 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.”

In addition, he said the operator was still confident about the future of all of its markets and reiterated the business’s confidence in Macau.

“We remain optimistic about the eventual complete recovery of travel and tourism spending across our markets, as well as our future growth prospects,” he added.

“We are fortunate that our financial strength supports our previously announced capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets.”