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Sands China net revenues decline 25.6 percent in 15Q2

Sands China Ltd.’s total net revenues decreased 25.6 percent to $1.77 billion in 15Q2, compared to $2.38 billion in the same period last year, its parent company Las Vegas Sands reported.

In a filing to the stock exchange LVS said adjusted property EBITDA for Sands China Ltd. decreased 29.5 percent to $564.5 million in the period, compared to $800.6 million in the prior year period.

Las Vegas Sands’ company-wide adjusted property EBITDA reached $1.02 billion in 15Q2, with its Macau portfolio bringing in $559.8 million.

Net income for Sands China Ltd. decreased 37.3 percent year-on-year to $388.7 million in 15Q2.

Despite the softer gaming market in Macao, The Venetian Macao continued to enjoy Macao market leading visitation and financial performance, the company said.

The property generated adjusted property EBITDA of $255 million in the second quarter with an EBITDA margin of 34.5 percent. Non-Rolling Chip drop was $1.68 billion with a Non-Rolling Chip win percentage of 26 percent. Rolling Chip volume during the quarter decreased 38.1 percent to $7.63 billion. Mall revenues increased 14.9 percent during the quarter to reach $48.5 million.

Sands Cotai Central’s net revenues and adjusted property EBITDA for the second quarter of 2015 were $554.2 million and $164.2 million, respectively, resulting in an EBITDA margin of 29.6 percent.

“We remain confident that our market-leading Cotai Strip properties, which will be complemented in the future by The Parisian Macao and the St. Regis tower at Sands Cotai Central, will continue to provide the economic benefits of diversification to Macao,” said CEO Sheldon Adelson.

In VIP gaming, Adelson said the the strength of the company’s premium direct business offset the weakness in the junket segment.

The company’s premium direct rolling volumes were up 3 percent quarter on quarter, resulting in overall rolling volumes declining by 10 percent sequentially, versus the 15 percent decline in Macau's VIP junket volumes.

Sands China’s hotel occupancy for the same period was 4 percentage points higher than that of the Macau market, at 83 percent.

UBS analyst Robin Farley said in a note that LVS had a 6 percent to 7 percent drop in occupancy at its large Macau properties, even though LVS has higher occupancy than market average, signifying that  LVS is shifting rooms out of junket hands and into direct premium players and cash sales.

“So it is interesting to note the drop in occupancy as the market prepares for 10-11k new rooms to open in Macau in the next 2 years.”

Regarding the opening of LVS' Parisian, Farley said LVS had last quarter targeted for an opening in late summer to Thanksgiving 2016, though no opening date was mentioned in today’s release  – with management citing the need for more labor to be able to open next year.

“Given the soft results since the late May opening of competitor Galaxy, we wonder if the Macau government may look to further pace the opening of new resorts, especially if the July visa loosening is not sufficient to increase mass demand.”


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