Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Las Vegas Sands Corp (LVS, Financial) reported a 13% increase in Macau market revenue for Q3 2024 compared to Q3 2023, indicating strong market growth.
- The company successfully opened the Londoner Grand asset and the first 300 Londoner Grand Suites, with plans to introduce more suites in the coming quarters.
- LVS delivered strong EBITDA results in Singapore, reflecting the positive impact of their capital investment program and growth in high-value tourism.
- The company repurchased $450 million of its stock during the quarter and increased its repurchase authorization to $2 billion, demonstrating a commitment to returning capital to shareholders.
- LVS increased its annual dividend to $1 per share for the 2025 calendar year, indicating confidence in future cash flow and profitability.
Negative Points
- Macau's EBITDA margin was impacted by disruptions at the Londoner Grand renovation, with a significant number of rooms out of inventory during the quarter.
- The company experienced lower-than-expected hold in the rolling segment, which negatively affected EBITDA margins.
- Despite strong visitation, the base mass segment in Macau did not recover as strongly as expected, impacting overall revenue growth.
- LVS faces ongoing disruption in Singapore due to room renovations and casino floor work, which is expected to continue until mid-2025.
- Concerns were raised about the potential impact of online gambling on land-based revenues, particularly in markets like New York, which could affect future investment decisions.
Q & A Highlights
Q: In the third quarter, the percentage of contra gaming revenues decreased. How much of this is due to changes in business management or market conditions?
A: Patrick Dumont, President and COO, explained that the decrease is a result of improved efficiency and cost discipline as the company manages its business for the future. The disruption from having many rooms out of inventory impacted margins, but the focus is on managing the business with discipline and leveraging the assets invested in.
Q: Can you discuss the better-than-expected performance during Golden Week and October in Macau?
A: Patrick Dumont noted that while they don't discuss current quarter specifics, they are pleased with the quality of visitors and the opportunities as new products come online. Entertainment plays a significant role in attracting high-value tourists.
Q: What is the status of the Marina Bay Sands renovation and its impact on EBITDA?
A: Patrick Dumont stated that significant room disruptions are ongoing, with about 1,600 rooms available versus 2,800 last year. The renovation is expected to be completed by mid-2025, which should eliminate disruptions and allow for EBITDA growth.
Q: How is the luxury spend pressure from Chinese consumers affecting your premium mass segment?
A: Robert Goldstein, CEO, acknowledged the resilience of Macau's gaming market despite economic challenges in China. While retail has struggled, gaming has shown strong growth, and they expect Macau's gaming revenues to exceed $30 billion next year.
Q: What are the expectations for the Londoner Grand's impact on EBITDA and market share once fully operational?
A: Grant Chum, CEO of Sands China, expressed confidence that the Londoner Grand will drive EBITDA growth and market share recovery as it ramps up in 2025. The Londoner Macau will be a unique offering with a large number of suites and high-quality amenities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
