Sands Q4 report: Macau continues to take a hit but Singapore operations post record mass gaming revenue

Las Vegas Sands has shared its financial report for the fourth quarter of 2022. As has been the case with its last few reports, Sand noted travel restrictions and reduced visitation in Macau continued to impact its results, although a recovery at Singapore’s Marina Bay Sands could be seen during the period, with mass gaming revenue reaching an all-time property record.

Net revenue for the period was $1.12 billion, an increase of 10.8% from the prior year’s quarter. The operating loss amounted to $166 million, widened from $138 million in the prior year’s quarter. However, net loss from continuing operations in Q4 2022 was $269 million, narrowed from $315 million in the fourth quarter of 2021.

As for the full year 2022, operating loss was $792 million, which widened from $689 million in 2021. Net income attributable to Las Vegas Sands in 2022 was $1.83 billion, or $2.40 per diluted share, although that was boosted by a $3.60 billion gain on the sale of the company’s Las Vegas real property and operations. This compares to a net loss of $961 million in 2021.

“While travel restrictions and reduced visitation continued to impact our financial performance during the quarter, we remain confident in a robust recovery in travel and tourism spending across our markets and deeply enthusiastic about the opportunity to welcome more guests back to our properties throughout 2023,” said Robert G. Goldstein, chairman and CEO.

In a statement, the Nevada-based casino company said it expects its ongoing investments in both Macau and Singapore will position it for future growth, and that support for local communities where it operates remains “central” to its efforts.

“In Singapore, we were pleased to see the robust recovery continue at Marina Bay Sands during the quarter, with the property delivering record levels of performance in both mass gaming and retail revenue,” added Goldstein. “We are excited to have the opportunity to introduce our new suite product to more customers as airlift capacity improves and growth in visitation from China and  the wider region is enabled by the relaxing of travel restrictions.”

Macau down, Singapore sees rebound

In Macau, while the company said it was “gratified” to receive a new gaming concession during the quarter, enabling it to continue operating in the gambling hub for another decade, results left much room for improvement. Still, Goldstein said Sands remains “deeply confident” in the future of the city, and considers it “an ideal market for additional capital investment.”

The Q4 results for Macau were, once again, affected by the pandemic and restrictions in place during the period. Subsidiary Sands China saw revenues fall by 31.7% year-on-year to $439 million, with a net loss widening from $245 million a year earlier to $348 million.

In contrast, Singapore’s Marina Bay Sands posted a new all-time revenue record in both mass gaming and retail. Net revenue at MBS was almost double year-on-year to $682 million, including $402 million in casino revenue, with Adjusted EBITDA up 54.2% Y-o-Y to $273 million. The strong performance is what led Sands to deliver a 10.8% group-wide net revenue increase in Q4.

Singapore's Marina Bay Sands

“Looking ahead, our industry-leading investments in our team members, our communities and our market-leading Integrated Resort offerings position us exceedingly well to deliver growth as travel restrictions are further relaxed and the recovery comes to fruition,” said Goldstein, who pointed out that business is returning to Macau after years of pandemic restrictions.

In a presentation to investors on Wednesday, the company said it will invest at least $3.8 billion in new facilities in Macau over the next ten years as part of the renewal of its concession to operate, reports Bloomberg. About 92% of the planned spending will be on non-casino attractions, including meeting space, entertainment facilities and a new garden attraction, as China puts pressure on licensees to ramp up investment in non-gambling amenities.

“If you’re looking for a negative comment on the Macau market, you’re on the wrong earnings call,” Goldstein quipped on Wednesday, as reported by Las Vegas Review-Journal. Eased travel restrictions and the start of Lunar New Year celebrations on Sunday have been a boost for the gambling hub in Q1 2023, where Sands holds a leading position.

Sands eyes New York opportunity

Elsewhere during the call, Goldstein told investors Sands is anxious to participate in the process to develop a resort in downstate New York. The first phase of that process ends February 3, with the New York Gaming Facility Board responding to questions from prospective investors. A second round of questions is expected to begin a month after the first questions are answered.

“New York is an extraordinary and unique opportunity,” Goldstein said in the call, as reported by Review-Journal. “The winning bidder or bidders will have an amazing opportunity because of the very simple dynamic of a huge market with limited capacity with only two casinos there. It’s probably the only place in the U.S. where you’d have millions and millions of people and yet there probably will be just a handful of casinos total. The win per unit there will be exceptional.” 

Nassau's Veterans Memorial Coliseum site

Sands indicated earlier this month it would develop an integrated resort at the Nassau Veterans Memorial Coliseum site on Long Island if chosen. Goldstein said Sands would go “all in” on providing a resort with a casino, spa, at least 400,000 square feet of convention space, restaurants, a new theater and “huge entertainment features, a transformational product which will positively impact the community in tourism.”

But that’s not the only opportunity Sands could explore. When asked by gaming analysts about other resort opportunities in Asia, Goldstein replied that while the company no longer has an interest in Japan or South Korea, it could look into developing in Thailand.