Las Vegas Sands
The top line
Net revenue came in at $1.17bn compared to $62m in the Covid-hit prior-year period. Operating losses were trimmed to $139m vs. $757m in Q220.
Consolidated EBITDA came in at $244m, flat QoQ but less than a quarter of the $1.11bn in Q219. Macau operation adjusted property EBITDA contributed $132m, Singapore $112m.
The $6.25bn sale of Las Vegas assets due to complete in Q421.
No angels: Questioned over its newly announced digital strategy, COO Patrick Dumont said any acquisition was unlikely to be “transformational.” “I don’t think we provide some value at the angel stage. From our standpoint, if we can get in early stage and mid-stage, that’s where we can be really effective. We aren’t just going to buy our way into a business, we will develop our way in.” He also spoke about what LVS sees as limited potential for conflicts from buying a company that worked with any competitors.
“Interestingly our company has seen a lot of changes and one of the things we thought about is we really aren’t conflicted,” Dumont said. “So it’s a limited universe who are our competitive set. We are a little bit neutral. In a lot of the markets we might want to target we don’t have any B2C operations.”
We can rebuild it: CEO Rob Goldstein was keen to stress that the cash from the Vegas assets disposal would be best put to use investing in LVS’s existing operations.
“Our best opportunities are to reinvest in Macau and Singapore. Frankly, they remain our biggest focus because they are so extraordinary and difficult to replicate in the rest of the world,” Goldstein said. “And we want to invest heavily in both places because that’s our route to $8-9bn EBITDA.”
Jefferies analysts said the company was now a “primarily a play on the very gradual recovery and investments in Asia.” The Macquarie team noted that the Macau recovery was “now more of a 2022 story.” They noted that with the combined $2bn of cash at hand combined with the proceeds from the Vegas disposal positioned it well for growth projects in both Macau and Singapore. Credit Suisse noted, though, that details on what the expansion plans might entail were sparse.
Bubble gum: Goldstein noted that the Covid-related issues in Macau and Singapore made the timing of a recovery there doubtful but that the outcome of fully re-engaged markets remained a certainty. Giving some insight into the short-term picture, Sands China COO Grant Chung noted the pace of vaccinations in China remained high at over 10m doses a day and increasing by 10% every 25 days. “We’re quite confident that if China continues at that rate, when you come to winter 80/90% will be vaccinated,” said Chung. “Then the travel bubble between China, Hong Kong and Macau is really possible.”
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