Gaming | Sands China saw 112.8% uptick in EBITDA, strong recovery in premium mass

Sands China Ltd. (SCL) posted positive adjusted property earnings before interest, taxation, depreciation and amortization (EBITDA), of USD100 million in the first quarter (Q1) of 2021, up 112.8% and 49.3% from USD47 million in the previous quarter and USD67 million in Q1 2020, respectively.
The group’s fiscal result for this year’s first quarter was released yesterday on April 22. The EBITDA of SCL was considered by JP Morgan, the international investment banking group, to be “solid profits.”
The aggregate net revenues for SCL totaled USD771 million in Q1, up around 15% quarter-to-quarter, yet down 4.6% year-on-year.
The quarterly revenue increase was predominantly driven by the increase in casino receipts.
The gaming gross revenues (GGR) generated by SCL displayed a significant advancement in the first quarter. It stood “strong” at USD703 million, up 21% quarter-to-quarter, yet down 13% year-on-year, the brokerage commented.
Among the aggregate GGR, the VIP segment generated USD177 million, with a solid increase of 209% attributed to “strong luck.”
Meanwhile, the mass market raked in USD486 million, staying flat when compared to last quarter – within which premium mass market increased 12% from the preceding quarter to USD336 million, equivalent to, JP Morgan stated, “around 50% of pre-Covid levels.”
“I think you’ve clearly seen the mass and VIP segments have diverged in terms of the recovery,” said Grant Chum, SCL’s chief operating officer, at yesterday’s earnings call.
Chum confirmed the premium mass segment has made “a very significant recovery,” and reach around “50% of pre-pandemic levels,” while the VIP segment is still struggling at “sub-20% of pre-pandemic levels” Such patterns for both are expected to “continue for the time being,” he added.
The premium mass GGR has outplayed unfavorable factors that arose in Q1 2021, namely the nationwide travel advisory to avoid unnecessary travel prior to Chinese New Year. Indeed, premium mass GGR has been on a growth trajectory in spite of such factors.
“The result probably reflects solid initial feedback on the launch of all-suites towers, including Four Seasons Grand Suites (290 suites) [in] 4Q20 and Londoner hotel (600 suites) [in] 1Q21,” JP Morgan’s analysts DS Kim, Derek Choi and Livy Lyu stated.
However, the base mass GGR went down by 20% quarter-to-quarter to USD151 million, dropping significantly by 20%. The base mass market has been the hardest hit by pandemic-related travel restrictions. Its sharp drop-
off for the quarter was mainly due to “weak visitation in Q1 2021 amidst Covid resurgence in China,” the brokerage explained.
In terms of non-gaming aspects, SCL’s retail market showed solid signs of revival, with tenant turnover returning to over 60% of pre-pandemic levels, the analysts said.
“We remain confident in the eventual recovery in travel and tourism spending across our markets.” Robert G. Goldstein, chairman and chief executive officer of the U.S.-based Las Vegas Sands Corp (LVS), the parent company of SCL, said in the statement.
Goldstein added that the demand for SCL’s offerings from those able to visit Macau remains robust, but “pandemic-related travel restrictions, particularly in Macau and Singapore, continue to limit visitation and hinder our current financial performance.”
LVS released its overall financial statistics for the fiscal first quarter of 2021 on April 22 as well.
According to LVS’s statement, the property EBITDA of its Macau operations was outperformed by its Singapore unit, Marina Bay Sands, which posted a positive USD144 million in Q1.