CASINO

Las Vegas Sands Macau mass market win best since 2014

TAGs: Las Vegas Sands, Macau, Marina Bay Sands, sheldon adelson, Singapore

sands-macau-londonerCasino operator Las Vegas Sands saw its Q4 profits as its mass market tables had their best quarter since 2014.

Figures released Wednesday show Sands revenue rising 11.7% to $3.44b in the three months ending December 31, while operating income shot up 53.5% to $1.36b and net income soared nearly 138% to $1.21b (although $526m of this gain was attributed to a one-time, non-cash benefit thanks to the new US tax bill).

For the year as a whole, revenue totaled $12.9b compared to just $8.8b in 2016, while operating income rose 39% to $3.46b and net income rose 68% to $2.81b.

Sands CEO Sheldon Adelson – who joked on the analyst call that his middle initial no longer stood for Gary but Growth, “so I’m now Sheldon ‘Growth’ Adelson” – said he was “extremely pleased” by the performance, which allowed the company to boost its quarterly ‘yay’ dividends while also repurchasing $75m worth of Sands stock.

Sands China’s revenue rose 13% to $2.1b in Q4, while net income jumped 49% to $519m. The FY17 revenue total was up 15.7% to $7.74b while profits rose 31% to $1.6b.

Across Sands’ Macau properties, VIP gambling turnover was up 4.1% in Q4, while mass market gaming win (counting slots) improved 18%. Premium mass table win enjoyed a particularly strong quarter, rising 52% year-on-year and up 33.5% from Q3 2017.

Sands president Rob Goldstein claimed to be “mystified” by the ‘decoupling’ of Sands’ premium mass and VIP growth figures, which traditionally rise and fall in tandem. Goldstein suggested it could be due to Sands de-emphasizing its reliance on junket operators in order to keep a greater share of the spoils.

Goldstein said Sands was seeing a “new generation” of younger, more affluent, entertainment-driven premium mass players, and more of them are coming from beyond Guangdong province, the traditional source of most of Macau’s gamblers.

The Parisian Macao, which opened in September 2016, suffered a modest revenue decline in Q4, primarily due to its VIP win rate falling from an absurdly high 4.52% in Q4 2016 to a more standard 2.75%. But Goldstein said the Parisian also suffered from a lack of hotel rooms that appeal to premium players, something Sands was working hard to remedy.

Company-wide, Sands China reported an all-time quarterly record at its hotel operations, with Sands Cotai Central’s room revenue up nearly one-fifth as occupancy improved 6.4 points to 92.3%, and the Parisian up 7.3 points to 98.4%.

Sands also provided more details on its plan to transform Sands Cotai Central (pictured) into The Londoner, a UK-themed property to complement its Venetian and Parisian venues. The $1.1b redesign is expected to be done by 2020.

Adelson said the property’s exterior would feature replicas of Big Ben and the parliament building, the Tower Bridge, double-decker buses, with ATMs disguised as iconic red telephone booths scattered throughout the property, and “bearskin hats aplenty.”

Adelson got a little wistful when he considered the scale of his Macau empire, remembering that Macau’s original casino king Stanley Ho told Adelson his efforts to transform the Cotai swamp into the Las Vegas Strip were doomed to fail. Adelson said his response was to say, “Stanley, if it’s too hot, get out of the kitchen.”

In Singapore, Marina Bay Sands’ revenue rose 14.1% to $825m while earnings rose nearly one-quarter to $456m. The gains game despite slight declines in both VIP turnover and mass market table drop, which was offset by a stellar 3.95% VIP win rate, more than a full point higher than Q4 2016.

But MBS’ hotel occupancy fell 2.5 points in Q4, and Goldstein expressed frustration with the property’s inability to grow. Part of the problem is the finite number of VIPs, a faction Goldstein said numbered in “not thousands, but hundreds.”

Goldstein also expressed frustration with MBS’ inability to grow its mass market figures, partly due to gamblers in other Asia-Pacific markets who find it easier to travel to Macau than to Singapore, Adelson nonetheless predicted MBS would produce its highest quarterly total to date sometime this year.

Stateside, Las Vegas operations eked out revenue growth of 2.4% to $422m despite gaming and rooms revenue suffering modest declines. In Pennsylvania, Sands Bethlehem’s revenue gained 2.2% to $142m.

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