Las Vegas Sands Q2 profit jumps 22% on Singapore strength; Macau income dips

Las Vegas Sands on Wednesday reported a 22.4% rise in second-quarter net income to $519 million, driven by record performance at its Marina Bay Sands property in Singapore, while its Macau unit posted a drop in earnings.

Group-wide net revenue rose 15% year-on-year to $3.18 billion, as consolidated adjusted property EBITDA increased 24.3% to $1.33 billion, the company said in its quarterly results.

Revenue from the Singapore operation surged 36.6% to $1.39 billion, with adjusted property EBITDA rising 50% to $768 million. Casino revenue was just under $1.07 billion, also up nearly 50% year-on-year, aided by a favorable hold on rolling play, which added $107 million to EBITDA.

“Marina Bay Sands once again delivered record financial and operating performance,” said Chairman and CEO Robert Goldstein. “Our new suite product and elevated service offerings position us for additional growth as travel and tourism spending in Asia expands.”

In contrast, Macau revenue growth was modest, with net revenue up 2.5% to $1.79 billion. Net income for Sands China Ltd fell 13% to $214 million, even as adjusted property EBITDA edged up 0.9% to $566 million. A high-rolling play hold contributed $7 million to EBITDA.

Casino revenue in Macau totaled $1.35 billion, with only Londoner Macao showing growth, up to $495 million from $318 million a year earlier. Other properties posted year-on-year declines.

Jefferies analysts said in a note that the Londoner’s margin improvement - from 29% in Q1 to 32% in Q2 - was due to the reopening of all 2,405 rooms ahead of the Labour Day holiday, following a $1.2 billion renovation program. The revamp included rebranding the former Sheraton tower into “Londoner Grand” under The Luxury Collection and revamping the Pacifica casino into the Londoner Grand Casino.

The company’s capital expenditure in the quarter totaled $286 million, with $138 million allocated to Macau and $129 million to Singapore. It also issued $1.5 billion in senior unsecured notes in May to refinance debt and fund corporate purposes, including share buybacks.

Las Vegas Sands repurchased $800 million worth of its own shares during the quarter, representing about 20 million shares at an average price of $39.59. It also spent $179 million buying back 87 million shares of Sands China, raising its stake to 73.4%.

“We repurchased $800 million of LVS shares under our share repurchase program during the quarter. We look forward to utilizing our share repurchase program to continue to return excess capital to stockholders,” Goldstein said.

The company maintained a quarterly dividend of $0.25 per share, payable on August 13 to shareholders of record as of August 5.

Las Vegas Sands ended the quarter with $3.45 billion in unrestricted cash and $15.68 billion in total debt (excluding leases). Its weighted average borrowing cost declined to 4.8%, from 5.0% a year earlier.

The company’s effective income tax rate rose slightly to 14.8%, mainly due to a 17% statutory rate on Singapore earnings.