LAS VEGAS (BLOOMBERG) - Las Vegas Sands Corp reported third-quarter profit that beat expectations as the company, battling challenges in Macau, controlled costs and relied on its Singapore operation for an earnings boost.
The US-based and world's largest casino operator posted a 47-per cent decline year-on-year in net income in its Macau operations for the third quarter. But results for its Marina Bay Sands property in Singapore were up by more than 10 per cent in the period, the firm said in a filing on Wednesday (Oct 21).
Despite the negative impact of a stronger US dollar, adjusted property EBITDA (earnings before interest, taxes, depreciation, and amortisation) at Marina Bay Sands in Singapore rose 10.8 per cent year-on-year to US$389.7 million (S$542.9 million) in the quarter ended Sept 30. The better performance was driven by growth in mass play from visitors to Singapore and "healthy" VIP volume, the company said.
On a constant-currency basis, adjusted property EBITDA increased 20.8 per cent from the prior-year period, Las Vegas Sands added.
Company-wide, including its operations in the United States, Las Vegas Sands' net income for the quarter fell 22.7 per cent year-on-year to US$519.4 million as net revenue declined 18.1 per cent to US$2.89 billion.
Profit, excluding some items, was 66 US cents a share. Analysts had forecast 63 US cents, the average of 16 estimates compiled by Bloomberg. Sands raised its quarterly dividend by 11 per cent to 72 US cents a share.
Sands, like the other five casino owners in Macau, has been pummeled by a sharp drop in betting in what has become the world's largest gambling market. A government crackdown on corruption led by President Xi Jinping, as well as a slowing economy, has prompted high-rollers to avoid the only place in China where casino gambling is legal.
Sands China Ltd, its Macau subsidiary, posted net income of US$343.2 million for the period, down by 46.8 per cent from a year earlier. Revenue fell 29 per cent to US$1.66 billion, while EBITDA declined 33 per cent to US$545 million.
Las Vegas Sands shares rose 3 per cent to US$48.24 in extended trading. The shares fell 1 per cent to US$46.84 at the close in New York, and have fallen 19 per cent this year.
Regulators in Macau have pushed the casino companies to offer broader entertainment experiences with new projects such as Sands China's Parisian Macao. That has led to some friction, as operators including Steve Wynn have criticised the government for delays in giving out allotments of table games, a major source of income from the multi-billion dollar investments.
On a conference call with investors, Sands executives said the US$2.7 billion Parisian casino would open in 2016, at the end of the third quarter or beginning of the fourth quarter.
"We have a lot of confidence in Singapore and Las Vegas and Bethlehem's performance next year to levels hopefully exceeding this year's levels," said Mr Robert Goldstein, Sands' president, citing properties outside of China including Bethlehem, Pennsylvania. "The big question mark obviously remains Macau. No one is confused about that. And it's virtually impossible for us to tell you what we - how to think about Macau."
With additional information from GGRAsia, an online newsletter on the Asian sector of the casino industry.