Global developer and operator of integrated casino resorts Las Vegas Sands Corp. (LVS) released yesterday its third quarter financial results, posting 82% drop in revenue compared to the same three-month-period in 2019.
From Billions to Millions
LVS reported $586 million in net revenue for the three months ending September 30, compared to $3.3 billion for the third quarter last year. Sinking revenues led to an operating loss of $610 million, compared to an operating income of $899 million for Q3 2019. The net result for the third quarter was $731 million loss, an improvement from the nearly $1 billion net loss in Q2. Q3 2019 generated net income of $669 million.
Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) came out negative, $203 million, from $1.28 billion last year, and year-on-year revenue was down across every major business category.
Slumps across the Board
Hotel room revenue sank 71.5% to $41 million, compared to the third quarter in 2019, occupancy rates collapsed 43.7%, and average daily room rate declined by 26.6%. Gaming revenue from slots fell nearly 20%, to $49 million, while table games lost 10% to $425 million, and win percentage declined 8%. Adjusted property cash flow for the three months was down $40 million.
Regarding LVS’s domestic market, Las Vegas, the company’s president and chief operating officer Rob Goldstein highlighted restrictions on large group gatherings affected midweek visitation, but the bigger issue was the slow recovery in airline business. Recently, airline operators slashed hundreds of flights from their schedules in response to the slump in demand.
Management Keeps the Upbeat Tone
Sheldon Adelson, chairman and CEO of LVS noted recovery from the impact of the virus outbreak was progressing in each of the company’s markets, while the greatest priority for the company remained to support team members and people in need in each of the local communities of Macao, Singapore and Las Vegas.
“We remain optimistic about the eventual complete recovery of travel and tourism spending across our markets, as well as our future growth prospects. We are fortunate that our financial strength supports our previously announced capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets.”Sheldon Adelson, Chairman and CEO, Las Vegas Sands
Despite the gloomy perspectives shaped out by analysts regarding the business recovery in Macao, LVS’s management remains upbeat about the long-term and continues with its investment program. LVS opened up last month a $450 million investment in the Special Administrative Region (SAR) of China, The Grand Suites at Four Seasons Macao, comprising of two hotel towers with 290 luxury suites. In addition, the $1.3 billion rebranding of Sands Cotai Central into the Londoner continues, some of its improvements scheduled to debut through next year.
LVS’s capital expenditure also continues in Singapore, where $3.3 billion were directed at building a new luxury tower at Marina Bay Sands and a new arena, planned to open in 2024.