CONF CALL
- Very hard to say whether Macau will get better in Q2
- As confident as they have ever been in long-term outlook
- At least 10% in regular dividend growth for next 3 years
- LVS: leading company for integrated resorts projects
- LVS: 97% Non-gaming space, 3% gaming space
- MICE in Macau: 640k people in 2008, 1.8m people in 2014
- LVS hotels account for 80% of lodging cash flow on Cotai
- Stay fully invested in Macau in long-term
- Today company is stronger than it has ever been
- S'pore: LVS is the profit leader in both mass and VIP markets
- Decline in VIP and premium mass segments contributed to EBITDA decline
- What about the 21% decline in base (grind) mass revs?
- Non-rolling win per day declined 6% QoQ. Base win per day declined 4% QoQ
- Property visitation and non-gaming both declined 4% YoY in 1Q 2015
- Hotel guests declined 10% in Feb 2015 vs Feb 2014. Occupancy declined 11% YoY.
- Mix btw cash and comped customers have changed somewhat due to changes in hotel inventory.
- Majority of cash-paying hotel customers do some gaming spend
- MBS: 'surprisingly strong quarter'; hold-adjusted EBITDA was $371m. on a constant-currency basis, hold-adjusted EBITDA was up 3%
- Highest 1Q mass win per day ever $4.7m ($5.0-5.5m on constant currency)
- Prudent credit policy
- Interested in Korea, Japan and Vietnam
- No repurchase in stock in past quarter. Have $1.76bn available for stock repurchase.
Q & A
- Why such low Macau margins? Have incurred more non-gaming costs than competitors. Nothing unusual this quarter.
- No phone betting hurt LVS in junket business
- Rather not go out and borrow money now
- Being more judicious with reinvestment to customers and advertising costs
- Venetian base mass business busiest they have ever seen
- Chance of Macau visitation cap: no chance whatsoever
- HK-Macau bridge: one of their contacts thinks it could open in 2016/2017, not 2020
- Re-examining all capex guidance for Parisian and other projects for cost cutting opportunities. Parisian need a labor boost, right now looking at late summer/Thanksgiving 2016 but could be as early as spring 2016 if they get the necessary labor
- Falling hotel occupancy: a lot more operators are now selling rooms rather than comping aggressively
- S'pore occu fell: currency issue. High-end suites (renting for $10k/day) had difficulty being filled. Still command the highest ADR in the market
- Why not buyback any stock in 1Q? Will be opportunistic in future. Wanted to protect dividends.
- Have a good vibe that one of the emerging markets will open up soon. Want to have enough cash for that opportunity.
- Can't do special dividend growth, regular dividend growth and stock buyback all at same time
