Release Date: July 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Macau market continues to grow with total gaming revenues increasing by 24% in Q2 2024 compared to the same period in 2020.
- Las Vegas Sands Corp (LVS, Financial) remains confident in future growth in the Macau market, expecting gross gaming revenue to exceed EUR30 billion next year.
- Strong performance in Singapore with EBITDA reaching $512 million, reflecting the positive impact of capital investment programs.
- The company repurchased $1 billion of stock during the quarter and paid a recurring quarterly dividend, demonstrating a commitment to returning capital to shareholders.
- Las Vegas Sands Corp (LVS) is actively exploring new development opportunities in jurisdictions like New York, Texas, and Thailand, indicating potential future growth.
Negative Points
- Disruption in Macau due to ongoing renovations, particularly at the Londoner Grand Casino, which has been closed since May and is scheduled to reopen in December.
- Macau's visitation recovery rate has slowed, particularly impacting base mass tables and unrated play.
- Elevated reinvestment rates in Macau due to the closure of specific casinos and preparation for shifts in customer segments.
- Concerns about the broader impact of tariffs on the Chinese economy and how it might affect future performance.
- Despite strong performance, the stock price remains near pandemic lows, raising questions about the company's valuation and market perception.
Q & A Highlights
Q: Can you give us a sense of how players and visitors are performing in Singapore, particularly regarding Mainland Chinese visitation?
A: Robert Goldstein, Chairman & CEO: We have a diverse customer base in Singapore, including visitors from Vietnam, Japan, Korea, Indonesia, and Malaysia. We haven't seen a slowdown in Chinese visitation. Despite seasonality and construction disruptions, Singapore's performance remains strong, and we expect continued growth.
Q: Can you provide an update on development opportunities, specifically in Thailand and New York?
A: Patrick Dumont, President & COO: We are ready to develop new ground-up projects in new jurisdictions. We are actively looking at opportunities in New York, Texas, and Thailand. Thailand is particularly interesting due to its strong tourism market, and we would be very interested if opportunities arise there.
Q: Can Macau's margins return to 2019 levels with the current environment and ongoing renovations?
A: Robert Goldstein, Chairman & CEO: Macau has always been competitive, but our investment-driven model has proven effective. The Venetian Macao and Four Seasons are performing well despite disruptions. We expect the Londoner renovation to enhance our competitive position and margins once completed.
Q: What's your approach to capital allocation given the current stock price and future growth prospects?
A: Patrick Dumont, President & COO: We see meaningful value in our stock and will continue repurchasing shares. We aim to balance growth investments with shareholder returns, maintaining our investment-grade status to support new projects and competitive positioning.
Q: How do you view the impact of potential tariffs on the Chinese economy and your business?
A: Robert Goldstein, Chairman & CEO: The Chinese economy has faced challenges, but we remain optimistic about improvement. Our business is built for scale and quality, and we are prepared to adapt to any political or economic changes.
Q: Can you provide more details on the impact of the Londoner renovation on your Macau portfolio?
A: Patrick Dumont, President & COO: The Londoner renovation has impacted performance, but we've successfully shifted patronage to other properties. We expect the renovation to enhance our competitive position and margins once completed.
Q: How do you view the recent strong hold in Singapore's VIP segment?
A: Robert Goldstein, Chairman & CEO: The strong hold in Singapore's VIP segment appears to be more structural than temporary. We are considering adjusting our normalized hold metrics to reflect this change.
Q: What are your expectations for visitation recovery in Macau, given the recent slowdown?
A: Robert Goldstein, Chairman & CEO: Visitation recovery has slowed, particularly in the base mass segment. However, premium segments and slot performance remain strong. We expect visitation to improve with new policies and infrastructure developments.
Q: How do you view the impact of recent CapEx investments in Singapore on your performance?
A: Robert Goldstein, Chairman & CEO: Our CapEx investments in Singapore are paying off, and we expect continued growth. Despite current disruptions, we anticipate stronger performance once renovations are complete.
Q: What are your plans for future renovations in Macau after the Londoner project?
A: Patrick Dumont, President & COO: We plan to undergo typical renovations at the Venetian and Four Seasons in 2025, following the completion of the Londoner project. These renovations will be managed to minimize disruption.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
