LVS negative Macau EBITDA 1Q, group profit on sale in Nevada
Macau casino operator Sands China Ltd returned to negative adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the first quarter and generated a net loss of $336 million, according to an announcement on Wednesday by parent company, US The Las Vegas-based parent company Sands Corp. generated positive quarterly adjusted EBITDA in its Singapore operation, although down year-on-year, it said declared in the income statement.
Sands China’s adjusted real estate EBITDA loss was US$11 million in the first quarter of 2022, compared to a positive result of US$100 million in the first quarter of 2021.
Las Vegas Sands posted a profit of US$2.53 billion in the three months to March 31, compared to a loss of US$278 million in the same quarter of 2021. The improvement was mainly due to a gain of nearly US$2.91 billion – net of tax – on the disposal of a discontinued asset, namely its Las Vegas, Nevada, USA operation.
Group net loss from continuing operations in the first three months of 2022 was US$478 million, compared to US$280 million in the first quarter of 2021.
According to generally accepted accounting principles (GAAP) in the United States, the total net income of Sands China – which manages a range of properties including the Venetian Macau (pictured) – fell to $547 million from $771 million dollars in the first quarter of 2021. Sands China’s net loss was US$336 million, compared to US$213 million in the first quarter of 2021.
Net revenue for Marina Bay Sands in Singapore decreased to US$399 million from US$426 million in the first quarter of 2021. The property’s adjusted EBITDA in the first quarter was US$121 million, against 144 million US dollars a year earlier.
“As pandemic-related restrictions continued to impact our financial results this quarter, we were able to generate positive EBITDA at Marina Bay Sands in Singapore, and for the business as a whole,” said Robert Goldstein, the group’s chairman and chief executive, as quoted in the parent statement.
He added, “We remain excited to welcome more guests to our properties as more visitors will eventually be able to travel to Macau and Singapore.”
The group’s quarterly net revenue was $943 million, compared to nearly $1.20 billion in the year-ago quarter. Its operating loss was US$302 million, compared to a loss of US$96 million in the year-ago quarter.
Sale of Nevada at 1T
February 23, Las Vegas Sands concluded the sale from its Las Vegas real estate and operations, and received approximately US$5.05 billion in cash proceeds, before working capital adjustments, transaction costs and income taxes.
The company said it had additionally provided US$1.20 billion of financing to the seller in the form of a six-year secured term loan.
JP Morgan Securities (Asia Pacific) Ltd said in a note on Thursday that Sands China’s mass market table games and slots (GGR) gross revenue in the first quarter “fell 19% quarter on quarter. to another to represent only 23% of pre-Covid levels”.
Andrew Lee, an analyst at Jefferies Group LLC, said in a Wednesday note that Sands China’s quarterly EBITDA was “back in the red and missed consensus estimates.”
He added: “Management expects a strong recovery in 2023 with the [Macau] The re-bidding process for game licenses will start from August and end before the end of the year.
“Macau’s gaming revenue is lower than we expected,” the upcoming Labor Day holiday period encompassing May 1, “will likely be a non-event,” Lee added.
The analyst added, referring to the neighboring mainland Chinese province of Macao, that although “there were no local infections in Guangdong on April 26”, the brokerage expected that the volume of visitors to Macau “remains low until local infections in Beijing and Shanghai are under control”. ”.
Sands China had been reduce operating costs in response to declining tourism in Macau linked to the Covid-19 outbreaks in the company’s main source market, mainland China, company chairman Wilfred Wong Ying Wai said recently.