Sands reduces losses in Q3 as revenue jumps 92.2%

| By Robert Fletcher
Land-based gambling giant Las Vegas Sands was able to reduce its net loss during the third quarter of its 2021 financial year after easing novel coronavirus (Covid-19) restrictions at its properties helped revenue climb 92.2% year-on-year.
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Revenue for the three months to September 30 amounted to $857m (£620m/736m), up from $446m in the Covid-hit corresponding period last year. This only covers its Asian properties, following its deal to divest its Las Vegas business.

Casino revenue rocketed 89.7% to $533m as Sands was able to welcome back more players to its casinos following the easing of certain Covid-19 restrictions, which impacted its performance in Q3 of 2020.

This also meant rooms revenue increased by 185.7% to $100m, food and beverage revenue 35.5% to $42m, mall revenue 98.8% to $165m and convention retail and other revenue 6.3% to $17m.

In terms of geographical performance, Macao operations revenue jumped 260.2% year-on-year to $616m, with the Venetian Macao casino leading the way on $253m in revenue, up 272.1% in last year.

However, the Marina Bay Sands property in Singapore saw revenue slip 11.4% to $249m, with intercompany royalties at $16m and intersegment eliminations at a loss of $24m.

Sands is now solely based on the Asia market after earlier this year agreeing to sell all its Las Vegas properties and operations. The operator will sell the subsidiaries that operate these US business to funds held by the private equity business Apollo Global Management for $1.05bn in cash and $1.20bn in seller financing.

Meanwhile, the Venetian’s real estate and related assets will be sold to VICI Properties, a real estate investment trust that was spun off from Caesars in 2017, for $4.00bn in cash. Sands expects the deal to complete in the fourth quarter of this year.

Those properties, listed as discontinued operations, generated revenue of $399m in Q3, a significant improvement on the $141m reported for the prior year. At $142m, revenue from hotels comprised the majority of this total, ahead of $141m from casino operations. A further $70m came from food and beverage sales, with $46m from convention and retail.

Turning to expenses, and operating costs for Q3 were 21.1% higher at $1.17bn, with resort operations that main outgoing at $810m. However, consolidated adjusted property earnings before interest, tax, depreciation and amortisation (EBITDA) improved from a loss of $163m to a positive of $47m.

After accounting for $157m in interest expense, a $137m loss on the modification of early retirement of debt and $12m in other costs, this left a pre-tax loss of $621m, compared to $659m last year.

Sands received $27m in tax benefits and also noted $99m in income from its discontinued operations and $127m from non-controlling interests, meaning it ended the quarter with a net loss of $368m, an improvement on $565m in 2020.

“While heightened pandemic-related restrictions impacted our financial results this quarter, we were able to generate positive EBITDA in each of our markets,” Sands chairman and chief executive Robert Goldstein said. “We remain enthusiastic about the opportunity to welcome more guests back to our properties as greater volumes of visitors are eventually able to travel to Macao and Singapore.  

“We also remain deeply committed to supporting our team members and to helping those in need in each of our local communities as they recover from the impact of the \covid-19 pandemic.”

In terms of year-to-date performance, revenue for the nine months through to the end of September was $3.23bn, up 67.6% on the previous year.

Operating costs were 18.1% higher at $3.77bn, but adjusted property EBITDA improved from a loss of $239m to a positive of $535m. Pre-tax loss was reduced from $1.60bn to $1.15bn, while net loss for the period was cut from $1.39bn to $838bn.

“Our industry-leading investments in our team members, our communities, and our market-leading integrated resort offerings position us exceedingly well to deliver growth as these travel restrictions eventually subside and the recovery comes to fruition,” Goldstein said.

“We are fortunate that our financial strength supports our investment and capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets.”

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