Las Vegas Sands Generates $3.1Bn in Q2

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Tuesday, September 5th, 2017 | Written by Charles Washington

The Las Vegas Sands Corp (LVS) has invested heavily in what the company calls their Resorts business model in recent years. With this strategy, the company is moving from a system that places sole emphasis on the casino floor to a more holistic approach that focuses on developing full resorts where revenue is generated from dining, entertainment and accommodations.

The goal is to give vacationers more to do that just hit the gaming tables and slot machines, and in Asia, the company has invested heavily in revamping their Macau and Singapore properties with the Resorts model in mind. Based on their latest posted earnings, the move has proved beyond inspired, and commenting on the company’s second quarterly financial results, LVS CEO Sheldon Adelson, said:

“We are pleased to have delivered a strong set of financial results during the quarter, led by another quarter of growth in Macao and a record-setting performance in Singapore. The benefits of our convention-based Integrated Resort business model remain evident in our financial results, with adjusted property EBITDA increasing 26.5% compared to the second quarter of 2016, reaching $1.21 billion. We also continued to return excess capital to shareholders during the quarter.”

18.6% Revenue Rise in Q2

During the second quarter of 2017, Las Vegas Sands Corp generated more than $3 billion in revenue, representing an 18.6 percent increase over the 2016 second quarter revenue result of $2.649 billion. Expand the focus to include the first three months of 2017, and the Las Vegas Sands Corp has brought in $6.247 billion revenue this year so far, or $881 million more than what was made during the first 6 months of 2016. For the quarter, net income is up by an impressive 61.9 percent compared to 2016’s figure of $638 million.

Macau

In Macau, the Las Vegas Sands Corp did extremely well. Their brand new resort on the Cotai Strip which opened in September 2016, called the Parisian, is being credited as the driver of revenues, and has been posting growth every quarter, with its latest result of $361 million in net revenue up by 13.5 percent versus what was earned during the first quarter of 2017. Commenting upon one of company’s many resorts in Macau, Sheldon Adelson explained:

“The Parisian has firmly established itself as a ‘must-see’ destination for visitors to the Cotai Strip, delivering sequential growth in hotel occupancy, ADR (Average Daily Rate) and gaming volumes while mass win per day of $2.44 million was the highest result since the property’s opening last year. We expect The Parisian to continue to deliver growth in the quarters and years ahead as the Macao market grows and as we continue to refine the property’s service offerings to appeal to the fastest growing and most profitable segments in the Macao market.”

Singapore

The Marina Bay Sands in Singapore had a record-breaking quarter, with the casino generating $836 million during the second quarter of 2017, up significantly from the $710 million posted during the same quarter back in 2016.

Resorts Model Key to Success

When you delve into the breakdown of revenues, it’s easy to see why the Las Vegas Sands Corp has focused so heavily on the Resorts model. Hotel accommodations accounted for $377 million in revenue across all of the company’s properties during the second quarter and have brought in $783 million in revenue since January 2017. Meanwhile, food and beverage sales resulted in $199 million in revenue during the second quarter, the mall and convention sector earned the company a further $159 million, and retail sales also totaled $138 million in revenue. Altogether, $873 million in revenue was earned from non-gambling activities at the company’s properties.

Hotel occupancy rates were solid throughout the second quarter, too. The Plaza Macao had the lowest average occupancy rate at 81.3 percent, and the Sands Macao had the highest rate at an impressive 98.5 percent. Average Daily Room rates at the Marina Bay Sands in Singapore were the highest at $397, while the new Parisian had the lowest average daily room rates at $138. The Marina Bay Sands in Singapore also saw the highest revenue per available room at $375, while on the low end was the Sands Cotai Central at $116.

Asian Expansion

At the end of the earnings call, Sheldon Adleson, Chairman and Chief Executive Officer, reiterated the company’s commitment to the Resorts model and stated that the company plans to continue investing and expanding in Asia, especially in South Korea and Japan.