Casino operator Las Vegas Sands reported double-digit declines in revenue, earnings and profits in Q3, but the company weathered the Macau downturn better than its competitors.
For the three months ending Sept. 30, Sands reported revenue down 18.1% to $2.89b, earnings down 18% to $1.05b and net income down 22.7% to $519.4m. Most of the decline came from Sands’ Macau operations, with smaller declines stateside and a year-on-year improvement at Marina Bay Sands in Singapore.
To put things in perspective, Sands’ 22.7% Q3 profit decline was a far sight better than the 61% and 36% declines reported last week by Wynn Resorts and Galaxy Entertainment Group, respectively.
Sands China’s revenue fell 28.9% to $1.66b, while earnings fell 32.8% to $545m and net income fell 46.8% to $343.2m. Sands credited the decline to the continued “challenging environment in the VIP and premium mass gaming segments.”
VIP table game turnover was down across all Sands’ Macau properties, including the Venetian Macao (-56%), Sands Cotai Central (-55%), the Four Seasons Macau (-55%) and Sands Macao (-52%). The VIP contribution to Sands China’s profit shrunk to 10%, down from 16% in the same period last year.
Mass market table drop was slightly better, down 21% at the Venetian Macao, 23% at Sands Cotai Central, 12.3% at the Four Seasons and 14% at Sands Macao. The mass share of the Macau profit pie fell two points year-on-year- to 51%.
Marina Bay Sands was a beacon of positivity, with revenue up 2% to $750.7m and earnings up 10.8% to $389.7m. In another case of role reversal, VIP turnover was up over 25% while mass market table drop fell 5.8%.
In Las Vegas, earnings at the Venetian and the Palazzo fell 11.5% to $79.8m despite a 1.3% rise in revenue. Most of the decline was on the gaming side, as softer baccarat play offset a rise in slots handle, pushing gaming revenue down 22.5% to $128m. At Sands Bethlehem in Pennsylvania, revenue rose 13.1% thanks to a 13.5% rise in gaming revenue.
ADELSON POLISHES MACAU’S APPLE
On the subsequent call with analysts, Sands boss Sheldon Adelson (pictured) made a point to strike a far more conciliatory tone than his good buddy Steve Wynn, who threw a minor tantrum last week over the Macau’s government handling of the gaming table allocation issue.
Adelson said Sands had “always been respectful” of the desires of Macau’s government and had more closely followed the government’s direction than any of the Macau casino concessionaires because “our gaming license in Macau is a privilege, not a right.” Adelson said he could always hope for things to be better, but “we’re in China, so let the Chinese decide what they want to do.”
Adelson’s traditional bluster returned as soon as the subject turned to Melco Crown Entertainment’s new Studio City resort. Adelson said he’d studied the figure-8 Ferris wheel at the heart of the building’s architecture and still couldn’t figure out whether the two circles connected.
Sands president Rob Goldstein joked that Adelson was angling for “a free ticket” on the wheel, to which Adelson – one of the richest men on the planet – replied that he’d be happy to pay for a ticket, “but they didn’t have change for a billion.”
