Las Vegas Sands Corp., a leading luxury resort and casino operator, has outperformed market expectations with its record revenue earnings. Sands Corp. owns two of the five-diamond hotels in the Las Vegas Strip in Nevada – The Venetian and The Palazzo. In the last decade, it has also developed luxury properties in Macau (China), Marina Bay (Singapore), and Bethlehem (Pennsylvania, the United States) with gaming and entertainment facilities.
Chief Contributors To Growth
Ignoring the state of recovery the United States has been in for the last couple of years, this Fortune 500 Company managed to show off a remarkable record. It must be acknowledged that the US share in the business was just 15 percent; China and Singapore largely contributed to the stupendous growth. Macau’s terrific growth rate, in particular, along with the new Marina Bay resort in Singapore contributed to the numbers.
According to the Chairman Sheldon Adelson’s statements, the net income for the 3rd quarter was $1.91 billion, 67 percent up, as compared to the last year’s $1.14 billion. Sands China Ltd. contributed with $1.08 billion, 28 percent up, as compared to the last year, and Marina Bay with $485.9 million net income. Las Vegas Sands Corp’s share was $290.7 million.
Adjusted property EBITDA shot up 137 percent and amounted to $645.2 million. Macau registered a record $334.6 million as compared to Las Vegas’ $58.3 million adjusted property EBITDA. Marina Bay Sands, Singapore, contributed with $241.6 million, the highest ever quarterly revenue from a single property in the history of the company. This is also its first full quarter of operations.
Overall adjusted property EBITDA margins increased to 33.8 percent from 23.9 percent in Q3 of 2009. Marina Bay Sands, Singapore, had a margin of 49.7 percent for the quarter while Sands Macao’s adjusted EBITDA margin was 31.3 percent.
The company earned 21 cents per share as compared to the last year’s loss of 19 cents a share.
The market showed its thumping approval as the share prices of NYSE-listed Sands jumped 10 percent which amounted to $45.25 after the press release. Sands China also rose by 6.4 percent and amounted to HK$15.94.
Increase in gaming volumes, hotel visitation and occupancy, and total overall operational efficiency have been credited as the drivers of growth.
It is truly a telling sign, as it was only two years ago that the majority shareholder and billionaire Sheldon Adelson lent money to the company to overcome the looming bankruptcy fears. With banks and other financial institutions crashing all around them, casinos found lenders hard to come by. Sands Corp. has now put to rest all such fears and has risen from under those towering shadows to stand tall. Its operational efficiency has surged.
What Lies Ahead?
Sands Corp. has just signed a ten-year deal with InterContinental Hotel Groups to link the casinos and resorts company to the hotels giant. The move is expected to provide access to 52 million members, mentioned in Intercontinental’s database, to Sands Corp. On the other hand, Intercontinental will be able to market their hotel rooms to 2 million Venetian and Palazzo casino’s or resort’s customers. So, there will be much scope for increase in room occupancy and rates, and acquisition of new customers for both companies.
With casino companies shying away from Las Vegas, and Macau becoming the largest hub for casino and gaming activities with a 60 percent growth in gambling revenues, the future clearly lies in Asia. Expansions in Marina Bay and Macau are what will steer the road ahead for Sands Corp.