Las Vegas Sands (LVS) reports third quarter results and strong growth in Asia

“The diversity of our hotel-casino resorts has made us a leader in Asia,” says Robert Goldstein of LVS

Las Vegas SandsThe recovery from the Covid-19 pandemic is gathering pace, and Asia is a big reason why.

The world’s largest casino company on Wednesday announced it achieved adjusted real estate EBITDA of $1.12 billion in the third quarter, a key measure of profitability in the gaming industry. That’s roughly in line with pre-pandemic levels, just 6% less than the same period in 2019.

Las Vegas Sands reported profit of 55 cents per share on revenue of $2.8 billion. Earnings met expectations while revenue slightly beat estimates, according to a survey of analysts by LSEG, formerly known as Refinitiv.

In Singapore, Marina Bay Sands is reporting numbers that exceed pre-pandemic levels in gambling, retail shopping and other spending, even as visitor numbers continue to fall lower. Profit margins have reached more than 48%.

A woman rides a bicycle in front of the Marina Bay Sands hotel and high-rise buildings in the background on September 4, 2023 in Singapore.

Roslan Rahman | AFP | Getty Images

In Macao, where visiting takes place Still about 15% below pre-pandemic levels, Sands said third-quarter occupancy was 96% higher than before the coronavirus lockdowns and customers were spending more per person.

Across the Macau market, mass gambling revenue reached 92% of third-quarter 2019 levels, or $5.1 billion, according to official government data. Las Vegas Sands CEO Rob Goldstein predicted in the company’s earnings release that the destination could reach $40 billion in annual revenue in the near future.

As cash flow increases, Las Vegas Sands is reprioritizing capital spending. Remodeling of Marina Bay Sands continues, nearly quadrupling the number of suites and achieving higher prices. The second construction phase in Macao begins with The Londoner, the latest offering in the portfolio.

Las Vegas Sands also announced a $2 billion stock repurchase plan through 2025.

Signage for the Sands Cotai Central Casino Resort, operated by Sands China Ltd., a subsidiary of Las Vegas Sands, in Macau, China, on January 17, 2019.

Paul Yeung | Bloomberg | Getty Images

Patrick Dumont, president of Las Vegas Sands, indicated that the company has changed the way it plans to return capital to shareholders, relying more on buybacks than on the dividends that his late father-in-law, Sheldon Adelson, so publicly supported has accepted every profit announcement.

Goldstein noted that stocks were trading as if Covid lockdowns were still in effect. So when the stock is cheap, buying opportunities arise, especially when Sands has $5.6 billion in cash.

When Bank of America analyst Shaun Kelley commented on the earnings release, “They’re probably the least leveraged gaming company I’ve ever covered,” Dumont said it had been a five-year process to turn the company into an investment company. Convert grade companies.

“It gives us access to the largest and most liquid debt market in the world because it is a very efficient class of capital,” he said.

Regarding the company’s efforts to secure a gaming license in New York, Dumont said: “This investment grade balance sheet also helps us in new jurisdictions because we have the financial ability to implement the projects we propose.”

Las Vegas Sands’ New York proposal calls for a $5 billion casino resort in Nassau County on Long Island. Sands’ competitors include MGM, which is seeking an expanded license for its existing Yonkers property; Resorts World, which plans to expand in Queens; Caesars and Wynn, both of which are looking for locations in Manhattan; and Bally’s, which wants to build a casino on a former Trump estate in the Bronx.

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