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Las Vegas Sands Corp. (NYSE:LVS) Q1 2024 Earnings Call Transcript

Las Vegas Sands Corp. (NYSE:LVS) Q1 2024 Earnings Call Transcript April 17, 2024

Las Vegas Sands Corp. beats earnings expectations. Reported EPS is $0.75, expectations were $0.62. Las Vegas Sands Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, ladies and gentlemen, and welcome to the Sands' First Quarter 2024 Earnings Call. At this time, all participants have been placed on a listen-only mode. We will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Daniel Briggs: Thank you, Paul. 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 Asia Operations. Today's conference call will contain forward-looking statements. We will be making these 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 measure are included in our press release. We have posted an earnings presentation on our website.

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We will refer to that presentation during the call. Finally, for the Q&A session, we ask those of interested to please pose one question and one follow-up so we might allow everyone with interest the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Rob.

Robert Goldstein: Thanks, Dan, and thanks for joining us today. The Macao market continues to grow as it has each in the past five quarters. Since the reopening in early 2023, the annual run rate of the market has grown every quarter from $17 billion in Q1 of last year to $22 billion, then $24 billion and $26 billion, now reaching $28 billion in annualized gaming revenue. We remain confident -- so fully confident in the future growth of the Macao market. I've said in the past, Macao market will grow to $30 billion and then $35 billion and then $40 billion beyond in the years ahead, I remain steadfast in our belief. We remain equally confident in our business strategy to invest in both the quality and scale of our market-leading assets in Macao.

Our capital investment programs ensure that we will continue to be the market leader in the years ahead. Our investments position us to grow faster than the market over the long term to grow our share of EBITDA in the market and to generate industry-leading returns on invested capital. Turning to our current financial results for Macao. We delivered a solid result for the quarter despite the disruption of our ongoing capital investment programs. SCL continues to lead the market in gaming and non-gaming revenue and most importantly, in the market share of EBITDA. Because of our market-leading investments, we will capture high-value, high-margin tourism over the long run. We have a unique competitive position in terms of scale, quality and diversity of product offerings.

The dazzling Las Vegas Strip lined with luxury Integrated Resorts, seen from a high elevation.
The dazzling Las Vegas Strip lined with luxury Integrated Resorts, seen from a high elevation.

Upon completion of the second phase of the London and our co-tying redevelopment program, our product advantage will be more substantial than ever. Turning to Singapore, we delivered a record quarter. We believe it's a record for the industry. So the team there has done an extraordinary job, and this is what happens when a superior product is located in the proper market. Our financial results in Singapore reflect the impact of our capital investment programs and our service capabilities. The appeal of Singapore as its tourist and destination and the robust entertainment and lifestyle event calendar also contributed to the growth at MBS. As we complete the balance of our investment programs, there will be a lot more runway for growth in the future.

Thanks for joining us today. I'll turn it over to Patrick for more details.

Patrick Dumont: Thanks, Rob. Macao EBITDA was $610 million. If we had held as expected in our rolling program, our EBITDA would have been higher by $31 million. When adjusted for lower-than-expected holds in the rolling segment, our EBITDA margin would have been 34.4%, or up 380 basis points compared to the first quarter of 2023. This highlights our focus on cost discipline and profitability. The ongoing capital investment programs at The Londoner and at the Cotai Arena had an impact on our results this quarter. The Cotai Arena was closed for renovation in January this year. After the significant reinvestment and renovation, the arena is expected to reopen in November. In terms of the second phase of the Londoner, we have now commenced the room renovation on the first Sheraton.

We plan the completion of the first tower by year-end and of the second tower by Golden Week in May of 2025. The renovation of the casino on the Sheraton side of London will commence in May of this year with the reopening scheduled for December of 2024. While there will be ongoing disruption from these capital projects, as these products come online between the end of '24 and the first half of '25, our competitive position will be stronger than ever. The scale, quality and diversity of product will be better than we have ever offered before. They will be unmatched in the market. Turning to Singapore, MBS and EBITDA came in at $597 million, an all-time record for the property and for the industry. Our strong results reflect the impact of high-quality investment and market-leading products.

Had we held as expected in our Rolling Play segment, EBITDA would have been $77 million lower. Had we held as expected in the Rolling Play segment, MBS EBITDA margin would have been 49.1%, or 181 -- 180 basis points higher than in Q1 of 2023. We have now completed both Tower 1 and Tower 2 of the Marina Bay Sands hotel refurbishment. While we have substantially completed the original $1 billion CapEx program, we are still in initial stages of realizing the benefits of these new products. We have now commenced the next phase of our capital investment program at Marina Bay Sands. The $750 million renovation that includes Tower 3. Tower 3 is scheduled to be completed by the second quarter of next year. This will support further growth in 2025 and beyond.

Turning to our program to return capital to shareholders. We repurchased $450 million of LVS stock during the quarter. We also paid our recurring quarterly dividend. In addition, LVS has completed the previously announced purchase of $250 million of SCL stock, which increases the parent company's ownership interest in SCL to approximately 71%. We continue to see value in both repurchasing LVS stock and increasing our ownership interest in SCL. We look forward to continuing to utilize the company's capital return program to increase return to shareholders in the future. Thanks again for joining the call today. Now, let's take some questions.

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