Anyone looking at the profits for the second quarter of this year for Las Vegas Sands Corp. Will be impressed. They increased by a whooping 120 percent. Much of that, however, came via record profits in Macau.
Even so, CEO Sheldon Adelson, made some off-hand comments during a recent quarterly earnings conference call that took place with several analysts. His comments were aimed at the Sands’ competition who are located on the Strip. He claimed that they were not working hard enough to increase the market.
According to the Las Vegas Sands, net income for the quarter came in at $529.8 million. This represents earnings of 64 cents per share. One year ago, it reported a net income of $240.6 million. This represented 29 cents per share.
These latest profits, impressive by anyone’s standards, were largely attributed to properties that the Las Vegas Sands operates in Macau. It was reported that revenues at the four properties increased 40 percent, coming in at about $2.07 billion. It was also reported by the Las Vegas Sands that its Macau casinos were able to bring in 14 million visitors during this same reporting quarter.
Back on the Strip however, company net revenues increased by only 5.6 percent, coming in at $345.7 million. This equals about 11 percent of the overall quarterly revenues which were $3.24 billion.
At the Palazzo and the Venetian, gaming revenues increased 11 percent. But, spending on food and beverages decreased by about 2 percent.
When asked if he thought the two Strip casinos results would be expected during future quarters, Adelson said he was not sure one way or the other. He then aimed his comments toward both MGM Resorts International as well as Caesars Entertainment Corp. The two control some 20 area hotel and casinos, and said that these companies are bringing down “the average daily room rates me and my friend Steve Wynn can offer”. He went on to say that those hotels that are owned by MGM Resorts (not including the Bellagio), as well as Caesars Entertainment Corp, “don’t have the number of rooms we have at the high-end. That sucking sound is their room pricing,” he said.
Adelson went on to make comments about the high long-term debt that the two companes have. Caesars Entertainment Corp is said to have the industry-high of some $21.5 billion in debt. For the MGM Resorts, its debt is about $13 billion. In contrast, Las Vegas Sands’ debt is reported to be at about $9.5 billion.
The combined casino operations for the Las Vegas Sands’ in Macau and Singapore are reported to be in excess of $1 billion during the second quarter, in cash flow dollars. This, of course, greatly improved the overall profits for the company. As for the Marina Bay Sands which is in Singapore, its net revenues increased by a tidy 6.4 percent, coming in at $739.5 million. Cash flow dollars are represented as those dollars in earning before taxes, interest, depreciation and amortization. For Macau, it came in at $657.2 million, and for Singapore it came in at $296.2 million.