Las Vegas Sands, the world’s largest casino company, reported strong earnings in its latest financial report, signaling a continuing recovery from the pandemic. The company announced earnings of 55 cents per share on revenues of $2.8 billion, in line with analysts’ expectations.
The recovery is being driven largely by the company’s properties in Singapore and Macao, which have experienced increased tourism spending from Chinese travelers. In Singapore, Marina Bay Sands has surpassed pre-pandemic levels in gaming, retail shopping, and other spending, with profit margins exceeding 48%. In Macao, occupancy rates have reached 96% higher than pre-pandemic levels, and customers are spending more per person. Mass gaming revenue in the Macao market has reached 92% of 2019 third-quarter levels, indicating a strong rebound.
As cashflow increases, Las Vegas Sands is shifting its strategy on how to return capital to shareholders. The company announced a $2 billion share buyback plan, signaling a new priority for capital expenditures. The company will continue to remodel Marina Bay Sands, adding nearly four times the number of suites, increasing prices. Additionally, the second phase of construction on The Londoner, the newest offering in the Macao portfolio, will begin soon.
Sands President Patrick Dumont stated that the company is relying more on share buybacks to return capital to shareholders, moving away from dividends. The company believes that its stock is undervalued, which creates buying opportunities. With $5.6 billion in cash, the company is well-positioned to take advantage of these opportunities.
The company’s strong financial position, with strong cash reserves and an investment-grade balance sheet, has also positioned it well for future projects. Las Vegas Sands is actively seeking a gaming license in New York and has proposed a $5 billion casino resort in Nassau County on Long Island. The company’s financial capability and investment-grade balance sheet give it an advantage in securing the necessary approvals and executing on proposed projects.
Las Vegas Sands faces competition in New York from other major casino companies, including MGM, Resorts World, Caesars, Wynn, and Bally’s. However, with its strong financial position and proven track record, Las Vegas Sands is well-equipped to compete in this market.
Overall, Las Vegas Sands’ earnings report reflects a strong recovery from the pandemic, particularly in its properties in Singapore and Macao. The company’s shift in strategy towards share buybacks and its investment-grade balance sheet position it well for future growth and expansion, including its plans in New York.