Another bad hold Q in Singapore shouldn’t overshadow a hold adjusted beat, accelerating share repurchases, 40% sequential hike in the quarterly dividend, and growing enthusiasm for retail mall monetization.
CONF CALL
- Non-gaming also did well in Macau
- Raised dividend to $2 for 2014
- Led market by far in mass market and premium mass
- More people visiting Macau and LVS properties on Cotai
- Mainland visitation up 15% in 2013
- Macau average length of stay still below Hong Kong's
- Table productivity will get better
- 4Q: 17.4MM visits to Macau property portfolio (8MM visits to Venetian Macau)
- MBS:
- Record for mass win/table/day: $4.63MM
- ADR: $425 occu: 97%
- Parisian: remain on budget and on schedule. Target a late 2015 opening.
- Japan: pursuing IR opportunity
- Korea: increased activity in that market
- Returned $700MM to Sands China shareholders
- Sands China Limited 2014 dividend increased by 31% to HK$0.87; HK$0.77 special dividend will be paid in February
- $1.4 BN repurchase program left. Will repurchase at least $75MM per month.
- Comfortable with 2.0x-3.5x gross leverage ratio; current leverage ratio is at 2.0x
Q & A
- Hold adjusted MBS margin: little north of 47%
- MBS: seeing increased volume in slot and mass business especially premium portions- margin remains low 60s
- MBS hold: 2.7% - 3.0% is achievable
- $12-14BN- monetizable retail mall sales opportunity: commencing process for final approval from Macau govt
- Macau: infrastructure improvements in Southern China
- 3 properties opening in 2015: Galaxy Macau (PH2), MSC and the Parisian; Parisian may open before at least one of them.
- MPEL doing quite well in premium mass- but LVS catching up
- Got ok for Four Seasons Co-op sale. Got ok for sale of St. Regis tower.
- SCC: rooms are biggest driver of mass/VIP. Still in the infancy stage of growth.
- Can hit 15-16k on mass win/table/day from current 13k
- Don't want to be in position where they owe money
- Japan: 1st legislation has been passed; 2nd legislation should be passed in June (location/ bidding information/licensing); everyone they spoke to believe the 2nd piece of legislation will be passed. Some major Japanese conglomerates have expressed interest.
- In a favored position; MBS often talked about as the IR model in Tokyo; 22% of conventions had Japan ties
- Macau - 800 games generating $8-9k win per day
- Been putting in more ETGs in SCC and Venetian
- Chimelong resort on Henquin will benefit LVS
- S'pore VIP market: junket structure not in discussion; pure mass play disappearing (S'pore locals); sees a flat market in the near-term, not much VIP RC growth in future; want to focus on margins; real growth resides in non-rolling chip segment
- Vegas: 2014 convention business in good shape (rates moving up a little bit)
- Commissions higher at Venetian. Mix between premium direct and junket affected the number.
- SCC: will see 44%-46% margins on non-rolling segment. Pure mass margins will tick up.
- S'pore low hold: not as much dollar volume as Macau; betting less in ties in baccarat; very volatile play
- Expect $60MM VIP RC for MBS annually