Analysts have been largely impressed by Sands China’s 15Q2 results despite net revenues missing estimates due to weak hotel revenue.
Sands China Ltd.’s year-on-year total net revenues decreased 25.6 percent to $1.77 billion in 15Q2, while its adjusted property EBITDA fell 29.5 percent to $564.5 million in the period.
“Sands China delivered a solid Q2 result on the back of surprising EBITDA margin improvement. While the net revenue missed our estimate (due to weak hotel and F&B revenue), adjusted property EBITDA of US$560mm matched our forecast and beat consensus,” Bernstein Research said.
Bernstein added that in the long-run, Sands China's core strength will be in developing "critical mass" among its inter-connected resorts as it positions itself to capitalize on Macau's shift from VIP to Mass.
Maybank analyst Kim Eng said Sands China’s six-month revenue of $3.5b, a drop of 31 percent YoY, was within expectations at 51 percent of ïts full-year estimate.
“But 6M15 EBITDA of USD1.1b (-38% YoY) was a tad above expectations at 56% of our full-year estimate due to the high 2Q15 VIP win rate.”
“Good 2Q15 EBITDA was driven by a high VIP win rate that should normalize in the long run. We continue to be wary of sluggish Macau GGRs and the potential negative impact of a smoking ban, whether full or partial. On Parisian Macao, management represented that it is slated to open in 12 months.”
Analyst Christopher Jones at Union Gaming said given the headwinds in Macau “we feel good about LVS’s current margin structure.”
“On top of the margin improvements, we continue to feel confident about the outlook for LVS’s retail operations in Macau, with year-on-year revenue growth of 21 percent in the quarter.”
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