LVS revenue and profits rise sharply, mostly on Macau upturn

In Q3 2023, Las Vegas Sands Corp (LVS) showcased a promising recovery, particularly in its Macau operations, buoyed by the resurgence in travel and tourism following the easing of pandemic restrictions.

The company yesterday [Macau time] reported a notable increase in both revenue and profit, exceeding Wall Street expectations.

The reported quarterly net revenue almost tripled to $2.80 billion, from $1.01 billion the previous year, driven by heightened gaming volumes and retail sales stemming from the influx of tourists to Macau and Singapore.

The Macau operations witnessed a surge in both gaming and non-gaming segments, contributing to a robust financial performance for the quarter.

The Adjusted Property Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for Sands China Limited stood at $631 million. Additionally, the firm’s consolidated Adjusted Property EBITDA reached $1.12 billion.

The financial results also revealed a net income of $449 million for the quarter, showcasing a strong rebound from a net loss of $380 million in the same quarter of the previous year.

The booming tourism sector played a pivotal role in this upturn.

Macau and Singapore both saw a dramatic increase in visitation, with Macau’s visitation surpassing three million in August, a first since the onset of the pandemic.

This influx was a result of eased pandemic restrictions, propelling LVS’s revenue growth, particularly from the mass segment in its properties like The Londoner and The Venetian in Cotai, as opposed to the VIP segment.

The encouraging figures prompted a 5.13% rise in LVS’s shares in post-market trading following the announcement.

Furthermore, Sands China Ltd reported a total net revenue of $1.78 billion, a remarkable recovery from $251 million in Q3 2022, and a net income of $231 million, reversing the net loss of $472 million from the previous year’s corresponding quarter.

The promising Q3 2023 results underscore the strategic importance of Macau in LVS’s portfolio, with the recovery in travel and tourism spending in the region significantly contributing to the company’s revenue growth and overall financial recovery.

“As the Macau market revenues continue to recover, our margins will naturally benefit from the improved business mix,” Patrick Dumont, president and COO of Las Vegas Sands said.

However, LVS still sees its Macau business being hindered by travel challenges.

In the conference call yesterday, Dumont said the company’s Macau business has seen slower returns from lower-spending consumers since the region reopened post-pandemic, which he attributes to still-hampered travel methods.

He said that visitation to Macau from some parts of China is still lower than in 2019 as a result of transportation challenges.

“The recovery story is not fully there in terms of air travel and in terms of accessibility,” he said. “I think it’s on the way, but it’s not fully back.”