The net income reported by gaming operator Sands China Ltd. increased 10.3 per cent year-on-year to US$513 million (MOP4.1 billion) in the last quarter of 2019, a filing by its controlling shareholder, Las Vegas Sands Corp.
In terms of net revenue, Sands China saw a slight 0.8 per cent year-on-year decrease to US$2.24 billion in the fourth quarter of last year.
Considering the whole of 2019, sands China saw its net revenues rise 1.8 per cent year-on-year to US$8.81 billion as net income increased 7.3 per cent to US$2.04 billion, with the group’s chairman and CEO, Sheldon Adelson, praising ‘solid results’ and noting the future large-scale projects in the group’s pipeline for Macau.
According to analysts from brokerage Sanford C. Bernstein, Sands gained GGR market share in the quarter, partly on high-end in VIP, going from 23.2 per cent in the previous quarter to 24.3 per cent in the fourth quarter of 2019.
‘We remain enthusiastic about our future growth opportunities in Asia. This 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 Macao and The Londoner Tower Suites. Additional tourism and entertainment amenities of The Londoner Macao will debut throughout 2020 and 2021,’ Adelson stated in the report.
The group is planning over US$5 billion of capital projects in both Macau and Singapore over the course of the next few years.
‘Base Mass was particularly strong for the quarter, +9 per cent y/y (+4 per cent q/q). Premium Mass was lighter for the quarter (-3 per cent y/y, flat q/q) due to construction disruption at SCC Londoner and Xi’s visit’ Bernstein indicated in a note.
Local adjusted property EBITDA by Sands China properties reached US$811 million in the quarter, an increase of 3 per cent over the prior year, with The Venetian remaining the main Sands property, with casino revenues stable at US$748 million.
However, the Las Vegas Sands CEO also addressed the current coronavirus outbreak in the recent financial report, describing it as ‘unique and serious’.
‘Our Sands China team is in close consultation with the relevant healthcare and public safety authorities in Macau, and we have implemented significant procedures and safeguards. We will continue to implement measures in line with government direction and hope for a swift containment of the virus,’ he added.
The number of visitors that traveled to Macau in the first five days of the Chinese New Year holiday period – from January 24 to 28 – has dropped by 73.6 per cent year-on-year to about 221,620 people as the health crisis unfolds, with Adelson saying this has affected and will affect ‘all segments of the business’.
Share prices of all six gaming concessionaires in Macau have also dropped in the last eight days, with the Chinese New Year holiday period, usually representing an annual high point for the gaming sector, greatly impacted by the coronavirus outbreak.
According to Bernstein, the first 21 days of January were ‘very strong’ and Sands management believes there will be ‘strong pent-up demand’ when the virus situation gets resolved, but that ability to mitigate fixed costs during the slowdown is ‘minimal’.Â
Concerning the US-China trade war, Adelson highlighted the importance of getting a trade deal done and suggested that his conversation with the US Secretary of State suggests that Phase 2 of the trade deal between China and the US might be reached sooner than expected.
