Bitter sweet may well describe Marina Bay Sands' fourth-quarter showing with Ebitda - a measure of operating profit - rolling in at US$456 million (S$596 million), up 25 per cent a year ago to cap 2017 with a record Ebitda of US$1.76 billion.
"I'm very excited about Singapore reaching the highest quarter that we've had of the year since we opened it in 2010," said Las Vegas Sands Corp chairman and chief executive Sheldon Adelson at an analyst call yesterday. LVS is MBS' parent company.
While the results achieved on the back of a 14 per cent jump in quarterly revenue to US$825 million was deemed "pretty extraordinary" by LVS' top executives, they lamented the integrated resort's (IR) inability to grow the VIP and mass market segments.
The solid fourth-quarter gains were chalked up despite a 4 per cent decline in VIP turnover to US$7.9 billion and nearly 3 per cent fall in mass market table drop to US$925 million. This was offset by a 3.95 per cent VIP win rate, more than a full point or 1.08 points higher than the fourth quarter of FY2016 and above the expected range.
Non-rolling chip win rate fell 0.2 points to 27.9 per cent. "Singapore is a wonderful success story but at this point, it's just a very large producer of Ebitda without growth prospects in the near future. So we would applaud management's efforts this year... it could be a lot less," said LVS president and chief operating officer Robert Goldstein.
Casino revenue, which contributes the bulk of MBS top line, grew 16 per cent to US$652 million. Revenue from rooms dipped 4.2 per cent while the convention, retail and other businesses noted a nearly 4 per cent drop.
Hotel occupancy slipped 2.5 points to 94.2 per cent in the three months to December from a year ago while the average daily (room) rate dipped nearly 1 per cent to US$419 over the same period.
"I'm disappointed," said Mr Goldstein, referring to MBS' volumes on the rolling chip side (VIP play) and mass market segment. "I don't see why there would be any catalyst in the near future to drive that."
Part of the reason for the muted momentum in the VIP space in the IR here is more competition in the region, from the Philippines, Thailand and chiefly, Macau. The other is that the VIP play is made up of "not thousands but hundreds of players", according to LVS executive vice-president and chief financial officer Patrick Dumont. And, he said: "I think it's much easier to go to Macau than Singapore for all the premium mass Chinese play."
Due to higher rolls and visitation and emergence of younger and more affluent people, LVS' Macau operations reported a 20 per cent jump in Ebitda to US$731 million in the fourth quarter.
LVS' net income more than doubled to US$1.36 billion in the final quarter on the back of a 12 per cent improvement in revenue to US$3.4 billion. Ebitda rose 20 per cent to US$1.34 billion from US$1.12 billion, which Mr Adelson attributed to the "oustanding growth" in Macau and Singapore.