• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

This may be good enough. We believe we were the Street high in Macau and Singapore and they came in pretty close. Low hold at MBS impacted VIP by $15MM so they would have beaten us in Singapore and overall with normal hold in Singapore. Here our are notes from the call.


"We are pleased to report that we delivered record revenues and adjusted property EBITDA during the second quarter of 2010. Strong revenue growth, increases in operational efficiency and robust operating margins at Marina Bay Sands in Singapore all contributed to substantial margin expansion and a record financial performance overall. In Macau, we delivered an all-time quarterly record of $307.0 million of adjusted property EBITDA, with each of our properties, The Venetian Macao, Sands Macao, and Four Seasons Hotel Macao and Plaza Casino, delivering substantial revenue and adjusted property EBITDA growth, as well as adjusted property EBITDA margin expansion. In Las Vegas, increases in gaming volumes and hotel revenues, in concert with the impact of our efficiency programs, allowed us to deliver $66.0 million of adjusted property EBITDA during the quarter."

- Sheldon G. Adelson, chairman and CEO


  • In Las Vegas, results are showing some improvement. Occupancies are strong, and weekend business has improved
  • Construction activity on Sites 5 & 6 is progressing. They are working with Macau authorities to ramp workers on the site
  • 963 rooms opened on April 27th and most of the remaining rooms opened on June 23
  • Have seen continued ramp of daily play at MBS since opening
  • Las Vegas- volumes were healthy but they had low hold.  Occupancy was good but pricing was challenged. Forward bookings continue to improve and have started to see better pricing trends on FIT, especially on weekends.
  • Leadership change in Macau - apparently the board made this decision. For at least the last 6 months, they had planned on beefing up the management team in Macau. 
  • Direct VIP play was Venetian Macau was 24% of total rolling volume.  At FS, direct VIP RC was $2.4BN or 49% of total RC. 
  • Retail sales at Venetian Macau were up 56% in June YoY
  • Remain confident that adding "destinations" to sites 5 & 6 will be additive to drawing customers to their properties
  • Sands Bethlehem had its best quarter since opening - efficiency and marketing efforts helped.  July 18th - they introduced 89 table games.  Table games have already positively influenced slot play, total play and other property revenue.  300 room hotel is scheduled to open Spring 2011
  • Las Vegas results:
    • Gaming volume was healthy but low hold impacted revenues by $30MM
    • Expect to realize more group rooms in 2010 than 2009. 2011 should be even better. 18% of total room nights were group. However, rates are still under pressure in the group segment.
    • Gaming business is healthy, costs are down, but rates are still under pressure
  • Deleveraging strategy: Paid down $420MM of debt (ex. Singapore).  At June 30th - had $3.8BN of cash & equivalents on their balance sheet. Had $3.2BN of R/C availability across their credit facilities in US and Macau.  $750MM of capex and pre-opening expenses in Singapore through YE 2010 - although about $400MM of that should be paid out of their cash flow. 
  • They have sufficient capital to complete Phase 1 of Sites 5 & 6
  • Weighted average interest rate in the Q was 3.7%. 
  • US credit facility leverage: $432MM TTM EBITDA, $4.3BN, cash: $1.9BN, 5.47x compared to 6x max leverage
  • Venetian Macau: TTM EBITDA $1.09BN, gross debt: 2.27BN, leverage was 2.09x compared to max leverage of 4x
  • Expect to execute the sale of non-core assets to assist in the deleveraging
  • Launching an amend and extend for their US facility - they will reduce the term loan in exchange for an extension of the facility and financial flexibility


Singapore specific:

  • Monthly progression of gaming win at MBS?
    • There was a substantial ramp from May to June.
    • RC - started around $300-$400MM range per week initially. By the beginning of June, it got above the $600MM range and is now around $800MM. Rolling volume will hit just over $3BN in July.
    • Slot win: May was $2MM+ range per day, then June was 2.5MM, and in late June/July - $3MM/day
    • Ramp in Mass and slots has continued
    • VIP hold has been lower than expected
    • Mass and slot win has been very consistent though
  • Occupancy is still low at MBS but on 2,500 rooms instead of on 1,200 average rooms. July occupancy is a little higher/similar than what it was this quarter. Selling 1,200-1,300 rooms per night. Have been light on corporate business so far.
  • (MBS) Opened up the electronic Bacc - 90 units.  By September 3rd they will have over 300 positions online.  Early results on Baccarrat were lower than expected but results are still ramping as people figure out that they are there.
  • Commission rates at MBS?
    • Thinks that 1.2% is about right on average for rebates. 1.2-1.3% is a good number to use.
  • Market share in MBS now?
    • Don't know Sentosa's numbers. Think that once they are fully ramped that they will have more than their fair share. Genting is doing a lot better than Sheldon initially thought they would do. Their bussing program is good and claim that they are giving 20 bps more in rebates than MBS.
  • Contribution margins of 50-67% at MBS
  • Radius of their marketing reach at MBS is wider than they thought
  • Slightly more than 1/3 visitors to MBS are from Singapore - trend has been steady from the beginning (35-37%)
  • More then $1BN in EBITDA in 2011 for MBS?
    • Think that they can do $1BN, not necessarily more than that
  • Contribution margins for the hotel and casino at MBS:
    • From the hotel it was minimal
    • Casino margin was about 52-55%
    • Think that their overall margins will be north of 50% when they are fully ramped
  • Retail at MBS - will have 160 stores open on Sept 3rd of the 280 stores.  Expect them to begin contributing to profitability. Their current EBITDA has no contribution from retail this quarter.
  • No update on junket applications - they haven't sponsored any.  They don't think that they need any since the demand on the premium side is very strong. Doesn't think that junket reps will get licensed in 2H2010.
  • Thinks that Genting is likely working with junkets given their higher commissions
  • Singapore hold impact was $25-26MM
  • Direct credit hasn't been an issue so far

All other questions:

  • Steve Jacobs departure? Is there a non compete?
    • No he does not have a non-compete. He didn't have an actual negotiated contract - just a term sheet.
    • "I would opt for him to go to work for a direct competitor" - Sheldon
    • No more departures of management teams. Claims they have people wanting to come back.
  • David Sisk: He has many years of very strong casino experience and some significant Macau experience. Think that his personality and skill set will bring attention to the day to day management of their properties
  • Ed Tracy: Has some casino experience - he build himself up from washing dishes to senior management.  Thinks that he's a good operational guy and will help marketing and sales.
  • Thinks that the government will allow them to have the necessary amount of labor that they need since they are hiring all the locals that they can.
  • Macau: July has been a terrific month so far. Will continue the trends of the last quarter ... "or more".
  • They are comping less in Vegas than last year - they're in the mid 20's for comping but comp less than their competitors.  Across the market there is too much comping but also too many rooms. 
  • Hope that they will get to 20% group business in 2010, and hopefully 30% in 2011 but high 20's is more likely
  • Evaluating pulling back direct play in Macau? Why?
    • Because junket growth has been very strong, so why not participate more in that growth
    • Analyzing whether it's worth keeping all strata of premium play because it's chasing away some junket reps from their property
  • CEO search for Sands China: Will pick a search firm tomorrow. Wants a person with Asian operating experience
  • % of roll and the commission that they pay isn't impacted by hold... hmmm not sure that's true
  • Vegas impact from Opryland shift of business?
    • They did help the summer a bit - there were 25,000 room nights or so for them.
    • It was good for Vegas though, but it wasn't highly rated room business because the rates were very low for a part of it.