Sands China EBITDA to decline 10 percent in 2016: Fitch

Monday 20th of June 2016

Fitch says it projects Sands China revenues and EBITDA to decline by 7 and 10 percent respectively in 2016, according to a note from the rating agency last Friday.

Fitch says it also projects it will then rebound to approximately 2015 levels by 2017 as the Parisian ramps up and the Macau gaming market begins to recover.

“Fitch forecasts negative 5 percent market-wide gaming revenue growth in Macau for 2016, which assumes modest sequential growth in the mass market and leaves room for continued but milder weakness in the VIP segment. Past that, Fitch expects mid-single-digit growth in Macau led by China's rising middle class, the new capacity in Macau and infrastructure projects in and around Macau.”

The rating agency affirmed the Issuer Default Ratings (IDRs) of Las Vegas Sands Corp. (LVS) and all of its subsidiaries at 'BBB-', with Rating Outlook Stable.

Last month, Sands China Ltd reported 16Q1 profit fell 9.6 percent year on year, the result of a challenging operating environment in Macau.

The results, which were below analyst expectations, saw total net revenue for Sands China down 7.9 percent to $1.6 billion in the first quarter of 2016, compared to $1.8 billion the year before. Adjusted property EBITDA decreased 2.5 percent to $517.9 million in the quarter, whilst net income was down 9.6 percent to $311.6 million in 16Q1, compared to $344.7 million in 15Q1.

Bricks & Mortar EBITDA Decline Rating Revenue