Las Vegas Sands (LVS) has exceeded analyst estimates in Q2 and reiterated that any future digital division launch will be confined to highly regulated markets.

Topline numbers

The casino operator’s revenue experienced a significant year-on-year increase of 144% to $2.54bn in Q2 2023.

This surpassed average analyst estimates of $2.39bn.

Consolidated adjusted property EBITDA also saw a substantial growth, reaching $973m, which is an impressive 366% increase compared to $209m in the prior year quarter.

Operating income was $537m, compared to an operating loss of $147m in Q2 2022.  

Net income from continuing operations reached $368m, showing a significant recovery from a net loss of $414m in Q2 2022.

News nugget

LVS has reported impressive financial results, with its Marina Bay Sands in Singapore generating $925m in net revenue, surpassing the net revenue of its individual Macau properties.

The Macau properties collectively brought in approximately $1.62bn in net revenue, a substantial increase from $368m in the same period last year.

LVS attributed this growth to the end of China’s zero tolerance Covid policy, leading to a rebound in tourist trade from the mainland to the special administrative region.

During the quarter, visitor numbers to Macau reached 6.7 million, accounting for about 68% of the visitations recorded in Q2 2019, which was the last comparable quarter before the pandemic.

In the conference call, LVS CEO, Rob Goldstein (pictured) expressed confidence in the company’s potential for growth, citing its substantial scale and $15bn of investment.

He believes the company’s diverse offerings across gaming and non-gaming segments will make it a major beneficiary as gross gaming revenues (GGRs) increase due to higher visitation.

Grant Churn, EVP of Asia Operations and COO of Sands China, also pointed out that LVS’s business mix has become more profitable compared to 2019, with a greater proportion of mass gaming relative to VIP gaming.

“In the current quarter, 87% of our GGR came from mass gaming, compared to 71% in Q2 of 2019.

“Additionally, the shift between gaming and non-gaming revenue is positive for margins, with non-gaming contributing 22% of revenues in the current quarter, up from 17% in 2019,” he said.

Best quote

CEO Rob Goldstein on the Macau rebound:

“Our numbers speak for themselves, they speak loudly. Six months ago we were virtually closed, and in the month of June, we reached $200m EBITDA.”

Best question

The most intriguing question for anyone working in the iGaming industry came from Daniel Politzer of Wells Fargo.

Politzer wanted to know more about LVS’s digital strategy, hinting that “there’s been some headlines lately that there’s been some progress”.

iGaming NEXT exclusively reported last week that LSV will enter the iGaming space with launch of B2B live dealer casino.

Patrick Dumont, LVS president and COO, replied: “We said a while ago that we were going to invest in ground-up digital activities. We’re not buyers, we’re builders.

“We’ve been working on a couple of digital initiatives, but it’s still early days yet. We don’t really have much to talk about but we think long-term and believe there’s real potential,” Dumont said.

He added: “Our focus is going to be on highly regulated markets. So that would mean Europe and North America.

“Our goal is to make sure that we maintain our regulatory standards in the best possible way, only working with partners where that makes sense and being very selective.”

Current trading and outlook

Despite witnessing a notable recovery, the results led to a 4% decline in LVS shares during post-market trading.

However, the company’s overall performance over the past six months has been positive, with shares showing a significant gain of 9.3%.

In a promising sign for shareholders, LVS has reinstated its quarterly dividend at $0.20 per common share.

This decision reflects the company’s confidence in its financial standing and long-term growth prospects.

Las Vegas Sands is looking to expand its global footprint and invest in new jurisdictions but has also reiterated its commitment to its “bread and butter” land-based business in Asia.

Releasing its Q4 2021 results, the US operator generated net revenue of $1.01bn during the period, down 0.7% on Q4 2020. It also posted a net loss of $197m, a significant improvement on the $376m net loss it recorded in the prior corresponding quarter.

Exactly $123m of the total net loss was attributable to Las Vegas Sands Corp, while the remaining $74m was attributable to the operator’s non-controlling interests.

Of the total revenue generated during Q4, the majority at $651m came from casino operations, down 5.5%. The operator’s malls brought in the next largest proportion, at $180m, up 17.6%, while rooms, food and beverage and convention, retail and other brought in $104m, $51m and $22m, respectively.

Singapore-based Marina Bay Sands was the operator’s largest single contributing property, generating $368m in revenue, up 6.7%. 

The company’s Macao-based operations generated the remaining $649m, down 3.9%, with The Venetian Macao generating the lion’s share of that figure at $272m, down 16.8%.

These figures saw Sands generate adjusted property EBITDA of $251m during the quarter, up 31.4% on Q4 2020. Marina Bay Sands contributed $177m of this figure, with the operator’s Macao properties generating $74m of positive EBITDA overall despite The Londoner, Parisian and Sands Macao making negative contributions.

For full-year 2021, these totals brought Sands’ revenue to $4.23bn, up 44% on 2020. Total net losses for the year came to $1.28bn, a reduction from the $2.14bn net loss it registered in 2020.

Of the 2021 total net loss, $961m was attributable to Sands, while $315m was attributable to non-controlling interests.

EBITDA for the full year 2021 came in at $786m, compared to a $48m EBITDA loss in 2020.

During a Q4 earnings call on 26 January, Sands chairman and CEO Rob Goldstein said the results continued to reflect the pandemic’s impact, as travel restrictions had an adverse effect on the operator’s visitation levels during the quarter. 

However, the business remains confident in the recovery of both the Singapore and Macao markets, he added.

In order to encourage future growth in its existing properties, Sands has embarked on a $1bn renovation project of the Marina Bay Sands, which will significantly improve the property’s appeal to premium customers, Goldstein claimed.

Both The Londoner and the Four Seasons in Macao will also provide growth opportunities for the operator as the region continues to recover, he said, offering broad appeal to both mass-market and premium customers.

The sale of the operator’s Las Vegas properties last year provides it with additional liquidity and optionality as Sands continues to pursue additional large-scale land-based resorts in the US and Asia.

The company is also “exploring multiple opportunities” with regards to the online sector, Goldstein said, and will provide more information on this at the appropriate time.

Executives on the call reiterated that due to some $70m in spending on non-recurring items during the quarter, Q4 should not be considered as a run rate period, and that because “things have been switched on and switched off so much, it’s hard to get a real read on the quarter.”

With regards to iGaming and online sports betting, Goldstein said the operator’s “bread and butter” will remain the Asian land-based market.

However, he did not rule out a future entry: “We will wait patiently. It hasn’t been a bad idea to wait for the last six months to eight months to see how this shakes out and there’s been a lot of blood spilt.”

Following Wynn Resorts’ announcement earlier this week that it would develop a luxury integrated resort including gaming facilities in the United Arab Emirates, Sands’ COO Patrick Dumont said the business understands the appeal of the region to resort developers, and that it is an area it will continue to watch and look at in the future.

Dumont concluded that there are also a lot of high-volume markets available to the operator globally, however, and it continues to keep its options open and examine opportunities to deploy capital in high-quality developments.