Marina Bay Sands sinks to US$113 million loss in Q2 on circuit breaker closure

MBS' $4.5 billion expansion includes a fourth hotel tower, an entertainment arena and additional events space. ST PHOTO: GIN TAY

SINGAPORE - Marina Bay Sands (MBS) sank deep into the red in the second quarter of this year, racking up a loss of US$113 million (S$156.5 million) after a near-three-month shutdown.

This is compared to the US$346 million profit it made between April and June last year, MBS' parent company Las Vegas Sands (LVS) reported on Wednesday (July 22) in the United States. Both figures refer to Ebitda or earnings before interest, tax, depreciation and amortisation.

No layoffs were announced in LVS' press release, which said the US casino giant would continue to execute its previously announced capital expenditure programmes in both Macau and Singapore. LVS had more than 10,000 full-time employees in Singapore in 2019, it said on Wednesday.

The $9 billion expansion plans announced by Singapore's two integrated resorts (IR) last year were called into question last week, after Resorts World Sentosa (RWS) announced that it would be laying off staff. While RWS did not confirm how many employees it let go, The Straits Times understood the number to be about 2,000.

Marina Bay Sands declined to comment when contacted on Thursday, but The Straits Times understands that the property is still hiring and has not retrenched any staff thus far.

Both MBS and RWS said last week that they will be continuing with their expansion plans, which are slated for completion by 2023 and 2025 respectively.

Speaking during an earnings call on Wednesday, LVS chief executive Sheldon Adelson said progress is being made on the expansion of MBS, but delays on the timing of the project are likely to occur.

"These delays are principally related to the impact of the pandemic, and we will provide additional updates in the future as conditions are continuing to evolve," he said.

The expansion of primarily non-gaming offerings was announced along with an extension to the exclusive rights for the two to run casinos here until the end of 2030. The Government had said the IRs would be subject to a higher tax rate on all gross gaming revenue if they failed to meet their investment commitments.

MBS' $4.5 billion expansion includes a fourth hotel tower, an entertainment arena and additional events space.

LVS itself swung to a net loss of US$985 million for the second quarter, compared with net profit of US$1.11 billion in the year-ago quarter. Revenue dived 97.1 per cent to US$98 million from US$3.33 billion previously, on the back on global closures of its casinos due to the pandemic.

In Singapore, both IRs remained shut beyond the two-month circuit breaker, which began on April 7.

Attractions, deemed to be at higher risk for transmission of the coronavirus, have been allowed to reopen from this month, subject to capacity limits and approval. Some hotels, including those at the IRs, have also been given the green light to resume operations for staycations.

Both IRs announced the gradual resumption of their operations earlier this month, with casino access limited to members and annual levy holders for now.

MBS said that some venues within the complex, such as the Sands Expo and Convention Centre, theatre and Marquee nightclub would resume later, in line with government guidelines.

Asked on the earnings call whether it would be possible for MBS to break even in the near-term given Singapore's restrictions on visitors and social distancing measures, LVS's chief operating officer Rob Goldstein replied that it is "very much so".

While MBS may be "handicapped" due to air travel restrictions, its benefits from a strong clientele of affluent permanent residents, he said. The casino is seeing a return of visitors and some demand for staycations is also expected, he noted.

"We feel positive about what's happening in Singapore... It's our best prospect as we speak today, a much better position than we are (at) in Las Vegas."

There remains demand for Mice (meetings, incentives, conferences and exhibitions) bookings in Singapore, though commitments remain a challenge given the visitor restrictions, Mr Goldstein said.

"So it's a Singapore-driven market only at this point," he said, adding that the outlook for events bookings in 2021 remains too murky to discuss at the moment.

MBS's total revenue for the second quarter plunged to US$23 million from US$688 million a year ago. Of this, casino revenue sank US$7 million from US$468 million previously. Other revenue from rooms, food and beverage, mall, convention and retail came in at US$16 million compared to US$220 million previously,

Striking a note of optimism, Mr Adelson said in a statement that the company is seeing early stages of recovery in each of its markets, and remains optimistic about an eventual recovery of travel and tourism spending as well as future growth prospects.

"We are fortunate that our financial strength will enable us to continue to execute our previously announced capital expenditure programmes in both Macau and Singapore, while continuing to pursue growth opportunities in new markets," he said.

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