LVS 4Q AND ITS MOVING PARTS

We’re higher on Macau and LV but lower on Singapore.  Going forward, a lot will ride on whether Singapore resumes growth and the incremental add from Sands Cotai Central.

Sands is reporting results on February 1st after the close, and we are projecting $2.55BN of net revenue and $909MM of EBITDA.  Our estimates are slightly higher than the Street: 3% above on net revenue and 2% higher on EBITDA.  Since the Q4 slowdown and seasonal market share loss in Singapore has been well telegraphed, we don’t expect that the quarter itself will be much of a stock driver.  The two big issues for us will be the 2012 Singapore growth rate – we’ll take the under vis à vis the Street – and the NET impact from Cotai Central.  The Street has a history of underestimating cannibalization. 

 

MACAU

Our estimate for Macau property-level EBITDA and net revenues is 6% and 7% above the street at $439MM and $1.31BN, respectively.  More specifically, we’re ahead of the Street on Four Seasons and Venetian, and below the Street on Sand’s performance.  Venetian played a little lucky while FS and Sands experienced lower than “theoretical” holds.  Net/net, we estimate that EBITDA would have been $4MM better if hold was 2.85% across the Macau portfolio.

Venetian

Venetian is projected to report net revenue of $765MM and EBITDA of $291MM, 4% and 9% above consensus, respectively.

• Net gaming revenue of $658MM
  • $265MM of net VIP revenue     
    • RC volume of $12.6BN (up 7% YoY) assuming 23% direct play and a hold rate of 3.04%
    • Rebate rate of 94bps of 31% of hold
    • Assuming ‘theoretical’ hold of 2.85%, net revenues would have been $16MM lower and EBITDA would be $9MM lower
• Mass table revenue of $334MM, up 23% YoY
• Drop of $1.2BN and 28% hold
• Slot win of $59MM
• $105MM of net non-gaming revenue
  • $57MM of room revenue ($235 ADR/92% Occ/$216 RevPAR)
  • $19MMof F&B revenue
  • $61MM of retail, entertainment and other revenue
  • $29MM of promotional expenses
• Variable expenses of $356MM
  • $303MM of taxes
  • $34MM of junket expenses assuming a commission rate of 1.21% (rebate + promoter expense )
• $23MM of recorded non-gaming expense
• $95MM of fixed costs, down 4% YoY but up from an estimated $88MM last quarter

Sands

We expect Sands to report net revenue of $328MM and EBITDA of $87MM, 3% and 6% below the Street, respectively.

• Net gaming revenue of $320MM
  • $141MM of net VIP revenue     
    • RC volume of $7.9BN (up 5% YoY) assuming 15% direct play and a hold rate of 2.70%
    • Rebate rate of 92bps of 34% of hold
    • Assuming ‘theoretical’ hold of 2.85%, net revenues and EBITDA would have been $7MM and $4MM higher, respectively
• Mass table revenue of $150MM, up 12% YoY
• Drop of $750MM and 20% hold
• Slot win of $29MM
• $8MM of net non-gaming revenue
• $184MM of variable expenses
  • $153MM of taxes
  • $21MM of junket expenses assuming a commission rate of 1.19% (rebate + promoter expense )
• $4MM of recorded non-gaming expense
• $53MM of fixed costs, up 10% YoY but down from an estimated $59MM in 3Q11

Four Seasons

We estimate $220MM of net revenue and $61MM of EBITDA, 33% and 17% above the Street, respectively.  Results would have been much stronger if not for the weak hold in the quarter.  1Q12 should be huge if the ramping trends we saw in 4Q continue or if we simply ‘quarterize' the December RC volumes and apply a hold rate.

• Net gaming revenue of $189MM
  • $132MM of net VIP revenue     
    • RC volume of $7.25BN (up 58% YoY) assuming 25% direct play and a hold rate of 2.61%
    • Rebate rate of 78bps of 30% of hold
    • Assuming ‘theoretical’ hold of 2.85%, net revenues and EBITDA would have been $12MM and $9MM higher, respectively
• Mass table revenue of $43MM, up 32% YoY
• $113MM drop and 38% hold
• Slot win of $14MM
• $31MM of net non-gaming revenue
  • $9MM of room revenue
  • $6MM of F&B
  • $26MM of retail, entertainment and other
  • Promotional expenses of $10MM
• $128MM of variable expenses
  • $96MM of taxes
  • $26MM of junket expenses assuming a commission rate of 1.15% (rebate + promoter expense )
• $9MM of recorded non-gaming expense
• $22MM of fixed costs, down 9% YoY but up from an estimated $19MM in 3Q11

 

SINGAPORE

We project $784MM of net revenue and EBITDA of $415MM, 1% and 2% below consensus, respectively.

• Net gaming revenue of $630MM
  • $265MM of net VIP revenue     
    • RC volume of $12.1BN, up 49% YoY but down 28% sequentially
    • Hold rate of 2.9%
    • Rebate rate of 1.27%
• Mass table revenue of $276MM
• Drop of $1.2BN, up 30% YoY and 22.5% hold
• $156MM of slot & EGT win
• $154MM of net non-gaming revenue
  • $77MM of room revenue ($333 ADR/98.5% Occ/$328 RevPAR)
• $133MM of gaming taxes
• $228MM of fixed costs, flat sequentially or up slightly if you exclude the $6MM of one-time expenses from last Q

 

LAS VEGAS

We estimate that Venetian and Palazzo’s net revenues will be $350MM with EBITDA of $96MM, which are 2% and 3% ahead of Street estimates, respectively.

• Net casino revenue of $128MM
  • Table revenue of $112MM
    • Drop of $533MM, up 15% YoY and 21% hold
    • Interestingly, hold is always higher QoQ in 4Q since Venetian opened
• $43MM of slot win
• $491MM of slot handle, down 15% YoY and 8.7% hold
• Rebates of $27MM or 5% of GGR
• $112MM of room revenue - $174 RevPAR (up 13% YoY)
• $133MM of gaming taxes
• $134MM of F&B revenue
• $23MM of promotional allowances or 15% of GGR
• 10.5% YoY increase in operating expenses to $244MM – up $1MM QoQ

BETHLEHEM

We expect Sands Bethlehem to report $109MM of revenue and $28MM of EBITDA, 9% and 18% above consensus estimates, respectively.

• $98MM of gaming revenues
  • Table revenue of $31MM
  • $67MM of slot win
• $11MM of net non-gaming revenue
• $42MM of taxes
• $39MM of operating expenses (flat QoQ)