November 1, 2012
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Following the path laid down by its Nevada rivals, casino operator Las Vegas Sands Corp. (LVS) reported a 1.1% drop in net income in Q3 2011. Mind you, LVS still generated net income of $349.8m, which neither MGM Resorts nor Caesars would complain about. Revenue was up 12.5% to $2.71b, but low hold on table games at Marina Bay Sands in Singapore and costs associated with the recent opening of the second phase of Sands Cotai Central in Macau caused a 5.1% fall in earnings to $876.9m.
As always, Sands China contributed the bulk of LVS? haul. Net revenues rose 36.7% to $1.64b and net income rose 17.4% to $326.7m. Looking at the individual properties, the Venetian Macau reported record earnings of $299m, up 18.3% over 2011. VIP win rate rose to 3.22% from 2.66% in 2011, offsetting an 11.9% drop in volume. Mass market table win rose to 31.3% from 27.6%. Slots handle rose 40.8% to $1.26b, although slots hold fell from 6.4% to 4.9%. At the Four Seasons Hotel Macau, VIP table turnover rose 115.4% but win fell 0.32 points to 2.58%. Mass market table turnover rose a more modest 3% but win fell 6.3 points to 32.6%. Slots handle rose 6.6% but slots hold fell two points to 4.4%. There are no 2011 comparative figures for the new Sands Cotai Central, but both VIP and mass market table volume were up from the 81 days that preceded Q3 and slot handle rose from $665.4m to $1.03b in the same period. However, all hold percentages were down in Q3. Sands Macau revenue was up 2.6% to $307.7m, despite the joint having lost nearly a fifth of its gaming tables to Cotai Central to get around Macau?s table cap.
Marina Bay Sands in Singapore was hit with a double whammy as VIP table volume fell 29.5% and win fell from 2.69% to 1.79%. Mass market table volume was off 5.7%, but win increased 1.4 points to 24%. Slots handle fell 6.1% while hold slipped 0.1 points to 5.2%. The net effect was a 27.8% drop in casino revenues to $470.8m and a 21% decline in overall revenues to $625.5m.
Lest we forget, LVS? operations in Las Vegas produced a 38% boost in casino revenues to $171.5m, thanks to an 8.5% increase in table games volume and a 7.7 point increase in table games win. Slots handle was up 1.7% while hold was unchanged at 8.7%. In Pennsylvania, Sands Bethlehem generated net revenue of $122m thanks to a 24.4% boost in table game turnover and a 1.7 point improvement in table win. LVS is currently sitting on $3.75b in cash while holding $9.5b in total debt.
We?d be remiss if we didn?t mention LVS made a stellar showing on Newsweek?s Green Rankings, the list that grades 500 publicly traded US companies on their environmental footprint. From #238 in 2011, LVS has risen to #128 ? the biggest positive mover on the new list. LVS exec director of sustainability Katarina Tesarova credited the rise to the over 140 sustainability initiatives implemented over the past year, but frankly, we suspect Newsweek just got confused by all that ?green? the company keeps generating every fiscal quarter.
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Source: http://calvinayre.com/2012/11/01/casino/las-vegas-sands-profit-slips-on-singapore-table-trouble/
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