Q4 blew out earnings estimates
Sands China Ltd., a subsidiary of the U.S.-based Las Vegas Sands Corp., enjoyed a healthy fourth quarter, with net revenues up almost 12 percent year-over-year to $3.44 billion. Adjusted net profits increased 43 percent to $700 million.
On an earnings call, Sands Chairman and CEO Sheldon Adelson was clearly pleased with the earnings, which beat the median analyst estimate of $718 million. “Our strategy to build integrated results towards scale and diversity is clearly paying dividends, as Macau’s mass and tourism growth accelerates,” Adelson said. “I’m very optimistic and I’m very, very confident about the growth of Macau.”
Acting on that optimism, he’s investing some $1.1 billion to transform Sands Cotai Central into an English-themed themed property, the Londoner. One of the first steps in the redo is the closure of the property’s Holiday Inn, which will take place before the end of the year.
During the earnings call, Las Vegas Sands Corp. President and Chief Operating Officer Rob Goldstein said, “I do believe there will be disruption. It won’t happen in 2018 until the very, very end of the year. We’ll close down the Holiday Inn, probably in November and December. The next 10 months you won’t see any disruption whatsoever.”
But, he said, “There will be some pain along the way.”
Though considered one of the company’s lesser properties in Macau, Sands Cotai Central was also a winner in Q4, reported Inside Asian Gaming, with revenues rising 25.5 percent and adjusted property EBITDA up 53 percent year-on-year. Rebranded as the Londoner, it will continue to bring a taste of metropolitan Europe to Macau.
“The Londoner has tremendous potential as the third landmark must-see destination,” Adelson said. “The scale of the current SCC assets are unmatched in Macau including over 6,000 hotel keys, a 400,000-square-foot retail mall, a 1,700-seat theater and over 300,000 square feet of developed MICE space. The Londoner renovation and expansion will completely re-envision the property, developing another 1.7 million square feet of space, expanding and enhancing all our offerings, hotel suites, retail mall, F&B, entertainment and MICE.”
On completion, the Londoner will accommodate “more overnight guests than the Venetian and the Parisian combined,” Adelson noted. “The Londoner will offer great potential for visitation and growth as a stand-alone integrated resort, but will also provide synergies with the Venetian Macao and Parisian.”
There’s another good reason for the Sands Corp. to double down on its commitment to Macau. Starting in 2020 and continuing through 2022, the Big 6 operators will see their gaming concessions expire. The central and local governments have ordered operators to diversify their attractions beyond gaming to create a more robust economy; those who go out of their way to comply presumably will enjoy a simpler renewal process.
According to Bloomberg News, with Macau’s historic downturn in the rearview mirror, the market has seen a return of VIP players, and newer resorts including the Parisian are also targeting mass gamblers.
