- Legal States
Jerome García July 23, 2020 3 min read
LVS: Second Quarter Net Loss of Nearly $1B
Las Vegas Sands (LVS) issued its second quarter financial results Wednesday, giving investors a taste of what the material impact of the ongoing health crisis onto the largest casino operators was. LVS posted a net loss of $985 million for the three months ending June 30, a huge drop from the more than $1.1 billion net profit for Q2 in 2019.
The company held a conference call among its executives, during which people at the helm of the casino giant expressed views that different market factors will affect the rate of recovery for each of the jurisdictions LVS operates, Las Vegas, Macao and Singapore.
In Las Vegas, where casinos were open for just 26 days in June, LVS saw its second quarter revenue fell 92.3%, to $36 million. The Venetian and Palazzo properties resumed operations June 4, after two-months-and-a-half closure, but recovery so far has been slow, prompting LVS to consider shutting down the Palazzo’s hotel to mid-week customers.
Answering a question during the conference call, LVS’s President and COO Rob Goldstein outlined business in Las Vegas is highly dependent on airlift and group and convention segment, both of which are struggling to return to pre-closure levels, painting a gloomy picture for the rest of 2020.
“It cannot make money with limited hotel occupancy – or a negligible occupancy midweek, maybe a 50% capacity weekend. In essence, we’re running a regional casino predicated on drive-in businesses. We have airlift somewhere around 40% of what it was and about 40% the occupancy as planes is much less than it was previously. So we’re in a world of hurt here in terms of Las Vegas.”Rob Goldstein, President and COO, Las Vegas Sands
In Singapore, where LVS’s casino-type resort Marina Bay Sands was closed for much of the second quarter, company’s revenue fell 96.7%, to $23 million. The gaming property is now open and despite the limitations in terms of airlift, the occupancy there was driven by casino-seeking customers, Rob Goldstein outlined.
“Obviously, that’s a market hampered by airlift because it’s kind of — it’s a hybrid market. There’s local business because of all the affluent foreigners who reside in Singapore, which there are many, fortunately… we’re very fortunate we have strong foreign clientele that has PR status inside the Singapore borders and reside there permanently.”Rob Goldstein, President and COO, Las Vegas Sands
The biggest drop in revenue was in Macao, just $41 million, compared to $2.11 billion for Q2 in 2019, a 98.1% decrease. Casinos in the Special Administrative Region (SAR) of China were closed for 15 days in February, but since reopening, severe restrictions on travel from mainland China to the SAR were imposed. Guangdong province recently lifted the 14-day quarantine for travelers from Macao, and the company’s executive staff believes the jurisdiction presents the highest recovery potential.
“…beyond Guangdong, we need to see the other provinces open as well. It’s not really that impactful financially — or for the income of Macao, the quarantine disappearing without a resurrection of the IVS.”Rob Goldstein, President and COO, Las Vegas Sands
Markets reacted negatively to the announcement as the share price of Las Vegas Sands on the NYSE fell 2.4% Wednesday, followed by another 4.18% drop today.
Jerome is a welcome new addition to the Gambling News team, bringing years of journalistic experience within the iGaming sector. His interest in the industry begun after he graduated from college where he played in regular local poker tournaments which eventually lead to exposure towards the growing popularity of online poker and casino rooms. Jerome now puts all the knowledge he's accrued to fuel his passion for journalism, providing our team with the latest scoops online.