Sands eyes $5b in Asia development projects

Thursday 24th of October 2019

Las Vegas Sands has $5 billion in development projects in the pipeline in Asia over the next few years, Chairman and CEO Sheldon Adelson said after the company released Q3 results that were largely in line with analysts’ expectations.

“We remain enthusiastic about the future growth opportunities in Asia,” he said on a call with analysts. “Next year, we will introduce approximately two million square feet of luxurious suite accommodations on Cotai with the opening of the Grand Suites at Four Seasons Macau and the Londoner Macau.”

Additional tourism and entertainment amenities of The Londoner Macao will debut throughout 2020 and 2021, he added. About $2.2 billion of the investments are in Macau, while the figure doesn’t include any possible IR development in Japan.

For Q3, Sands China saw net revenue fall 2.0 percent, compared to the third quarter of 2018, to US$2.11 billion, while net income remained flat at US$454 million.

In Macao, adjusted property EBITDA was US$755 million, consistent with the prior year, led by a 9 percent gain in the mass market segment, while VIP rolling volume was down across all of its properties.

The adjusted property margin there was 35.7 percent, up 70 basis points from the prior year.

“We remain steadfast in our belief that Macao is the best market in the world with respect to the continued deployment of our capital. We look forward to making additional investments in Macao as we contribute to Macao’s diversification and evolution into Asia’s leading leisure and business tourism destination,” Adelson said.

Analysts say the results were in line with expectations. Bernstein said Sands China maintained market share at 23.2 percent, with its mass market share at 28.7 percent, up from Q2, but down from 30.1 percent last year.

Sands lost VIP share in the quarter, declining to 13.1 percent, below Q2 2019 at 15.3 percent and below Q3 2019 at 16.1 percent. The firm noted that VIP hold was at the low end of the normal range, while it was higher in mass.

Marina Bay Sands in Singapore saw a 19 percent gain in VIP GGR on higher hold of 4 percent. Mass GGR was down 4 percent, hurt by the hike in entrance fees for locals and disruption on the casino floor.

Hold adjusted EBITDA fell 4 percent at $387 million.