Singapore as advertised by the shorts but Macau strong and getting stronger. Dividend raise a plus.
CONF CALL NOTES
- Organic growth at existing properties: 3Q Macau market share 19.3%
- Oct Macau Market share: >20%
- 17% market share of RC volume for 3Q
- Macau table productivity: win/mass/table increased 26% to $8.700 vs $6,900 (LVS is the market leader)
- MBS: cost $105MM in EBITDA due to low hold; main customers: Singapore, Indonesia, Malaysia, HK, Taiwan, China, Japan, Korea, and Vietnam
- SCC: sees strong operating performance continuing in the quarters ahead as phase II ramps up; Holiday Inn, Conrad, and Sheraton are doing well. Connecting bridge will open in December.
- Parisian target opening: late 2015 or earlier
- Are actively pursuing Japan, Korea and Vietnam. Taiwan is taking more time.
- Madrid: will only have projects that return above 20%
- Parisan Macau: waiting for govt approval
- Japan: gaming legislation supposed to be submitted to the Diet in April 2013
- Korea: have met with local govt officials; have not negotiated tax rates; expect a 'Singaporean-type' of restriction on local play
- Vietnam: long process in Ho Chi Minh City
- Taiwan: interested in the Mainland but process has been slow
- Toronto: have decided on location; needs the approval of Toronto City Council
- South America (Brazil, Argentina), NYC (Queens): have looked at opportunities there
- Singapore: VIP and mass volumes have been volatile in the last four quarters; hotel and MICE business have performed very well; there is rarely an empty room. Retail has done well.
- Las Vegas: held very well; continues to be driven by Asian customers; had some group cancellations in 3Q but 2013 outlook looks stronger.
- Sands Bethlehem: Hotel was sold out for the last 4 days
- Hold-adjusted EPS was 53 cents
- Only $100mm debt due in remaining 2012 and 2013; interest at 2.9%
- Net debt/EBITDA: 1.9x
- Comfortable with net leverage ratio of 3-3.5x if international opportunities present itself
Q&A
- Macau SSS growth rate: should accelerate in the future.
- Mass/ETG/slots: getting more share by the quarter
- Singapore: flat in the VIP segment in the last 4 quarters; VIP growth is a challenge; Mass/ETG also challenging. Will be targeting $10-20K premium mass customer into MBS---believes that segment is the growth for the future
- SCC: January is the date for additional tables
- S'pore RC volume: customer demand was soft, has been in the $11-12 billion range recently. Goal is to go back to $15-16 billion range.
- Singapore looks like a $45-50 billion rolling market
- VIP market in China is slowing...same deceleration in Singapore.
- 24 new stores opening in Four Seasons, opening 43 new stores in SCC; a mall will open next to Sheraton
- SCC: very happy with the junkets there; mass tables have been slow due to strong performance from Venetian. Goal is $10k win/mass table/day--what Venetian did in 3Q
- SCC margins were hurt due to lack of premium mass
- 3Q Direct Play at Four Seasons: 16% vs 37%
- Lot 3: govt has said they will give more tables to people who build more non-gaming--they want 10% casino, 90% non-gaming property composition. LVS is confident they will get 500 tables but may get 450.
- SCC: reallocating space for premium mass
- Europe: gaming tax will be relatively low
- NYC market: Willets Point in Queen
- Macau: premium mass vs regular mass margins-- 40s, not much difference between tiers
- Singapore: premium mass vs regular mass margins--high 60s, also not much difference between tiers
HIGHLIGHTS FROM THE RELEASE
- Raised quarterly dividend by 40% to $0.35 per common share, or $1.40 per common share per year, beginning in 1Q 2013
- Hold-adjusted EBITDA: $950.7 million
- Consolidated adjusted property margin of 32.4% vs 38.4 in 3Q 2011
- Due to lower hold (approximately $74 million adjusted property EBITDA impact) and increased provisions for accounts receivable (approximately $15 million in adjusted property EBITDA impact) in Singapore.
- Sands China: property EBITDA increased 24.3% to $485.6 million
- MBS
- Adjusted EBITDA $260.8 million; hold-adjusted EBITDA: $365.6 million
- Rolling chip hold: 1.79%
- Rolling chip volume dropped 30% YoY
- Non-Rolling Chip drop decreased 5.7% to $1.13 billion
- Las Vegas: adjusted property EBITDA of $98.2 million, an increase of 4.1% compared to the $94.3 million in 3Q 2011
- Higher than expected table games win percentage of 28.1% for the quarter. Table games drop, which benefited from strong growth in baccarat play, increased 8.5% to a third quarter record of $581.5 million. Slot handle increased 1.7% to $498.4 million while slot hold percentage was 8.7%. Hotel ADR was flat compared to last year's quarter, although RevPAR decreased 5.6% due to a lower occupancy percentage.
- D&A: $226.5 million
- Net interest expense: $62.3 million
- Unrestricted cash balances as of 3Q: $3.75 billion
- Total debt outstanding, including the current portion, was $9.50 billion. Total principal payments for the remainder of 2012 and the full year 2013 are approximately $8.7 million and $97.5 million, respectively.
- 3Q capex: $327.3 million, including construction and development activities of $231.8 million in Macao, $79.8 million in Las Vegas, $10.9 million at Marina Bay Sands, and $4.8 million at Sands Bethlehem.