Las Vegas Sands profit more than doubles on Asian strength

las-vegas-sands-revenue-upUS casino operator Las Vegas Sands Corp. (LVS) saw profits more than double in the second quarter of 2013, as continued strength in its Asian operations more than compensated for the comparatively sluggish performance at LVS’ stateside casinos. Profit topped $529.8m, up sharply from $240.6m in the same period a year ago, which suffered from a $100.7m impairment charge. Overall revenue rose 25.6% to $3.24b, while casino gaming revenue rose 29% to $2.67b.

As usual, Sands China provided the bulk of LVS’ returns, with its $2.07b in revenue representing a 39.9% boost over Q2 2012. Adjusted earnings rose 54.8% to $654.8m while net income rose a whopping 203.8% to $487.6m. In Macau, the Venetian Macao saw net revenue rise 37.8% to $894.7m, thanks largely to a higher than normal rolling chip win rate (3.41% v. 2.68% last year). Rolling chip volume was up 6.1% to $11.84b, while non-rolling chip drop rose 56.1% to a record $1.59b, reflecting the continued surge in Macau’s mass-market sector. Slots handle was flat at $1.15b.

Over at Sands Cotai Central, rolling chip win headed in the opposite direction, falling from 3.12% last year to 2.35% in Q2 2013. Overall revenue still managed to rise 119.9% to $584m compared to the 81 days in which the gaming joint was operational in Q2 2012. Rolling chip volume rose 110.2% to $14.3b, while non-rolling chip drop rose 215.4% to $1.3b and mass-market win was relatively stable at 22.1%. Slots handle rose 87.8% to $1.25b, while hold slipped from 4% to 3.8%. Sands Cotai’s occupancy rate fell 7.6 points to 67.5% in the quarter.

At the Four Seasons Hotel Macau and Plaza Casino, revenue rose 3% to $274.1m. Rolling chip volume was up 8% to $9.94b, while hold slipped to 2.93% from 3.05%. Mass-market drop was up 104.5% to $186.1m, but win rate plunged a hefty 21.4 points to 22.5%, while an 8.6% drop in slots handle was partially offset by a rise in hold from 5.4% to 6.2%. At Sands Macao, revenue was up 8.5% to $294.7m despite a 5.6% drop in rolling chip volume. Mass-market drop rose 14.8% to $822.9m while win was relatively flat at 20.3%. Slots handle rose 4.2% while win was unchanged at 4.1%.

In Singapore, revenue at Marina Bay Sands rose 6.4% to $739.5m, thanks to a 24.9% boost in rolling chip volume and a slightly improved win rate of 2.53%. Mass-market drop fell 3.5%, but hold rose 1.2 points to 23.4%. Slots handle was flat at $2.74b, while hold decreased slightly to 5%. Marina Bay Sands continues to enjoy a stellar occupancy rate, up 0.3 points to 99.4% during the quarter, despite an 8% rise in the average daily room rate. Across Asia, Sands’ retail mail operations reported revenue from tenants was up 15% to $107.3m.

As for the US market, revenue at LVS operations in Las Vegas rose 5.6% to $345.7m thanks to a 26.9% boost in table game drop, although win fell from 16.5% to 15.9%. Slots handle was up 6.8% to $475.5m, while hold was virtually unchanged at 8.7%. Occupancy rose 5.4 points to 91.6%, while revenue per available room rose 6.8% to $188. In Pennsylvania, market leader Sands Bethlehem reported a 10.2% revenue rise to $126.8m, with table game drop up 18.5% and win rate rising 1.9 points to 16.2%. Slots handle rose 4.2% to $1.05b, while win slipped 0.2 points to 7%. Occupancy rose 10.3 points to 72.5%.

On a post-earnings call with analysts, LVS boss Sheldon Adelson said the lackluster performance on the Las Vegas Strip was in part due to the “sucking sound” generated by rivals MGM Resorts and Caesars Entertainment, which operate a combined 20 Strip properties. Adelson took a shot at the two companies’ “significant” debt burdens, for which neither company has a “big way” of eliminating. Adelson suggested Caesars’ quarterly income “barely pays” its debt servicing, whereas LVS could be “totally debt-free just by selling off our malls.” In order to put “bodies in their casinos and bodies in their beds,” Adelson believes Caesars and MGM are aggressively undercutting their room rates, which brings down the rates “me and my friend Steve Wynn can offer.”