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Summary:
- LVS expressed confidence in Macau’s market growth and optimism in its ability to continue to be the market leader in the region.
- The optimistic approach came amid the completion of renovations in Macau and Singapore.
- The company’s Q2 net revenue fell $60 million short of expectations, as per market consensus, but went up 9% from Q2 2023.
Despite trading at $39.25 post-market on Wednesday, a marker that was below its 54-week low of $40.17 and down more than $20 from its highest value on August 1.
After falling $60 million short of market expectations in terms of net revenue in Q2 2024 according to the freshest second-quarter results, Las Vegas Sands Corp. remain optimistic about its future in the Asian market.
“Confident in the Future Growth in the Macau Market”
The company still recorded a 9% net revenue gain from Q2 2023 at $2.54 billion to $2.76 billion in Q2 2024 with gaming revenue for Macau going up 24% YoY and mass gaming revenue growing 29%.
This made chairman and chief executive officer Rob Goldstein convey an optimistic message to Wall Street analysts on the Q2 earnings call.
“We remain confident in the future growth in the Macau market”, Goldstein said, adding he believed the Macau market will grow gaming revenue that will go over the $30 billion mark in 2025 and keep growing year after year.
While calling Macau a “deeply competitive” market, the CEO explained they will be making use of their strategy featuring high quality, scale, and product offering diversity to effectively compete against other operators and preserve their position as a leader in the future.
Goldstein added they will also “capture high-value high-margin tourism over the long term”, mentioning the completion of the second phase of The Londoner and Cotai arena which is expected to make their product more advantageous than ever.
According to president and chief operations officer Patrick Dumont, Macau EBITDA fell $4 million short of previous projections at $561 million.
The Londoner’s margins were affected by the renovation that saw 1,500 rooms be taken out of inventory.
At the same time, the Venetian’s margin was 38.2%. The company expects the margin to improve at the Venetian Cotai arena later this year once visitation to the market and growth in unrated play boosts.
Dumond also stated that margins at Four Seasons and The Plaza reached 40% while explaining renovations for the Londoner were still underway, with the first tower expected to be completed by the end of the year.
The second tower will be finished by May 2025. The Londoner Grand Casino, which has been shut down since May, will reopen in December.
With their products going online by the end of the current year and the first half of next year, the company’s competitive position is expected to be “stronger than ever”, with “meaningful EBITDA growth and margin expansion in the future” foreseen.
Strong Q2 for Singapore
Singapore also recorded a strong second quarter despite the ongoing disruption from construction work at Marina Bay Sands.
Marina Bay Sands’s EBITDA was $512 million, showcasing the importance of high-quality investments in products that are leading the market and high-value tourism.
The $1 billion refurbishment project at Marina Bay Sands has been largely completed. However, the company said it was still in the initial stages of “realizing the benefits of these new products” with the future phase of Marina Bay Sands‘s capital program expected to be completed in Q2 2025.
Goldstein explained a great variety of Asian tourists are coming to Singapore and Las Vegas Sands has not noticed any slowdown from mainland China either.
It’s the largest-earning EBITDA building in the history of gaming and it’s going to get stronger. Our goal is $2.5 billion out of Singapore and you’re going to see it in the coming years.
Dumont didn’t deny their potential plans for obtaining a gaming license in New York and other markets like Thailand.
