Las Vegas Sands Corp. (LVS) net income rose 1.8 percent in the second quarter of 2018, to the disappointment of analysts.
LVS announced that its Q2 earnings stands at $556 million, or $0.70 per share short of market expectations of $0.78 per share.
The market reacted negatively with LVS shares sliding 5.4 percent to $71.10 in extended trading.
Consolidated net revenue of LVS, climbed 6.2 percent to $3.30 billion in the three months ending June 30, 2018. The company’s operating income in Q2 2018, fell 2.4 percent to $797 million.
LVS attributed their lower income to softer rolling volume and win percentage in its Singapore unit, offsetting its gains Macau. The company also wrote-off $92 million in relation to costs from the Four Seasons Macau tower project.
LVS founder, chairman and CEO Sheldon Adelson is happy how the firm’s balance sheet “remains the strongest in the industry.”
“We experienced strong growth in both the VIP and mass table games segments, enabling us to grow our market share of gaming revenue both year-over-year and sequentially. Our Macao operations are back to generating an annualized EBITDA run rate of $3 billion. Marina Bay Sands continue to produce strong cash flows, while Las Vegas has another strong quarter on a hold-normalized basis,” Adelson said during the earnings call on Wednesday.
In Macau, total revenues of Sands China Ltd. (SCL) jumped 18 percent to $2.11 billion in Q2 2018. Its net income was at $427 million in the second quarter of 2018, a 30 percent increase from the second quarter of 2017.
SCL attributed the robust Macau results to The Venetian Macao which had revenues of $830 million, a 23.1 percent increase year-on-year while its casino revenue increased 25.8 percent to US$677 million.
Its record rolling chip volume surged 44.3 percent to US$7.46 billion year-on-year.
The Parisian Macao posted revenues and adjusted property EBITDA of US$371 million and US$114 million, respectively, both up slightly from the 2Q 2017.
SCL’s newest property has casino revenue of US$308 million, 8.1 percent higher than the previous year with Rolling chip volume for the quarter at nearly US$4.48 billion an increase of 19.1 percent while non-rolling chip drop at the property’s casino was US$1.06 billion, up 8.6 percent from a year earlier.
Sands Cotai Central also had a robust second quarter, with net revenue rising 15.9 percent to US$509 million.
International brokerage Union Gaming noted that premium mass has notably outpaced base mass for the 8th consecutive quarter.
“We view SCL’s 2Q18 – above market VIP growth, and in line mass growth (and flattish sequential results) – as all the more impressive given what can only be described as a confluence of significant headwinds,” Union Gaming analyst Grant Govertsen said in its note.
However, the gains of LVS in Macau were greatly affected by the lackluster performance in Singapore.
Marina Bay Sands’ (MBS) revenue dipped 15.5 percent to US$705 million in the quarter. Its adjusted property EBITDA also dropped 25.2 percent to US$368 million.
MBS suffered from fewer bets and lower win percentage. Data shows rolling chip volume for the Singapore unit plunged 32.6 percent to US$5.87 billion year-on-year. MBS’ rolling chip win rate declined 2.84 percent from 4.42 percent in the three months ending June 30, 2017.
Adelson expressed confidence that LVS will be able to penetrate the Japanese casino market after the country passed its controversial Integrated Resorts (IR) Implementation Bill.
Adelson told analysts that his decades-long ties to Japan will give them quite an advantage in securing a casino license. The billionaire reminded them that he used to produce COMDEX trade shows before it was sold to Softbank Corp.
“So I’ve got a good background and reputation in Japan for being the leading MICE Integrated Resort developer and operator. And I think that the estimates by people who know – say they know, whom we believe they know, say that we’re in the number one pole position,” he said.
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