Las Vegas Sands (LVS) Q3 2024 Earnings Call Transcript

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Las Vegas Sands (LVS -1.37%)
Q3 2024 Earnings Call
Oct 23, 2024, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Sands third quarter 2024 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, senior vice president of investor relations.

Sir, the floor is yours.

Daniel J. Briggs — Senior Vice President, Investor Relations

Thanks so much. Joining the call today are Rob Goldstein, our chairman and CEO; Patrick Dumont, our president and COO; Dr. Wilfred Wong, executive vice chairman of Sands China; and Grant Chum, CEO and president of Sands China and EVP of Las Vegas Sands Asia operations. Today’s conference call will contain forward-looking statements.

We will be making those statements under the safe harbor provision of federal securities laws. The company’s actual results may differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measures are included in our press release.

We have posted an earnings presentation on our website. We will refer to that presentation during the call. Finally, for the Q&A session, we ask those with interest to please pose one question and one follow-up, so we might allow everyone with the opportunity to participate. The presentation is being recorded.

I’ll now turn the call over to Rob.

Robert Glen Goldstein — Chair and Chief Executive Officer

Thanks, Dan. Thanks for joining us today. The Macao market continues to grow. Total gain in revenue for the market grew 13% in the third quarter of 2024 when compared to the third quarter of 2023.

Masking revenue grew 14% in the quarter compared to one year ago. We believe the Chinese economy will grow in flourish in the future and remain steadfast and Macao market will grow along with it. I believe that Macao market gross gaming revenues will exceed $30 million in 2025 and growth from there. The scale and quality of the assets we have built are second to none.

We believe that our assets position us to grow faster than the market as growth expands beyond the premium customer segment. Our business strategy is predicated on investing in high-quality assets that also has scale. We’ve designed our capital investment programs to ensure that we will continue to be the market leader in the years ahead. We believe our approach will enable us to grow faster in the long term, grow our share of EBITDA in the Macao market, and generate industry-leading returns on invested capital.

Turning to our results in Macao, we delivered solid EBITDA for the quarter despite material disruption at the Londoner, which peaked during the third quarter. We opened the Londoner Grand Casino in the last week of September. We also opened 300 — the first 300 Londoner Grand Suites. We will introduce more Londoner Suites longest week throughout the next three quarters, the total of 1,500 Londoner Suites and means in service by Lunar New Year 2025, with a full content of 1,500 suites and 905 rooms in service by Golden Week 2025.

SCL continues to lead the market in gaming and non-gaming revenue and in-market share of EBITDA. Our objective is to capture a high-value, high-margin tourism over the long term. We have a unique competitive advantage in terms of scale, quality, and diversity of product offers. Upon completion of the second phase of The Londoner in 2025, our product couldn’t be more pronounced than ever.

We delivered another strong quarter in Singapore despite port hold percentage. The results in rate-base stands reflect the positive impact of our capital investment program and the growth of high-value tourists. We’re doing a PO Singapore as a destination is enhanced by robust entertainment or lifestyle event calendar. As we complete the balance of our investment programs in the first half of 2021, there will be considerable runway for growth.

Thank you for joining us. Let me turn it over to Patrick before we have Q&A.

Patrick Dumont — President and Chief Operating Officer

Thanks, Rob. Macao EBITDA was $585 million. If we had held as expected in our rolling program, our EBITDA would have been higher by $2 million. When adjusted for lower-than-expected hold in the rolling segment, our EBITDA margin from Macao portfolio of properties, excluding the Londoner, would have been 35.1% or down 110 basis points compared to the third quarter of 2023.

Our margins at the lender were directly impacted by disruption of the Londoner Grand renovation. We closed a casino and had around 2,500 keys out of inventory during the quarter. Margin at the Venetian was 38.6%, and we expect margin improvement as the Venetian Cotai Arena comes back online in November and as visitation to the market and grows in unrated play, both increase in the future. Margin at the Plaza and Four Seasons was 39.7% for the quarter.

As Rob mentioned, we continue to progress our Londoner Grand renovation program. As these products come online, our competitive position will be stronger than ever. We expect meaningful EBITDA growth and margin expansion in the future. Turning to Singapore.

MBS’ EBITDA came in at $406 million. Assuming expected to hold our rolling play, our EBITDA would have been approximately $78 million higher. The strong financial results reflect the impact of high-quality tourism investment and market-leading product and growth in high-value tourism overall. Had we held as expected in our Rolling Play segment, MBS EBITDA margin would have been 47.5%, 40 basis points higher than that of the third quarter of 2023.

While we have made substantial progress on our $1.75 billion refurbishment program in MBS, we are still in the initial stages of realizing the benefits of these products, including from our tower gaming offering, which opened in September. The next phase of our capital investment program at Marina Bay Sands is scheduled to be completed during the second quarter of 2025. This will support further growth in 2025 and beyond. Also, please note on Page 44 of our earnings presentation, we have provided estimated costs for our Marina Bay Sands IR2 project.

We couldn’t be more enthusiastic about investing in the long-term growth of high-value leisure and business tourism in Singapore. The original concept was in effect an expansion of Marina Bay Sands, including Arena. Our new program creates a full-scale integrated resort development with a full suite of amenities, including gaming capacity. We look forward to discussing that long-term growth driver in the Q&A session.

Turning our program to return capital to shareholders. We repurchased $450 million of LBS during the quarter, and our board increased our repurchase authorization to $2 billion for future repurchases. We paid our recurring quarterly dividend of $0.20 per share in the quarter. In addition, our board increased our annual dividend to $1 per share or $0.25 per quarter for the 2025 calendar year.

We really look forward to continue to utilize the company’s capital return program to increase returns to shareholders in the future. Thanks again for joining the call.