Las Vegas Sands Corp. filed information to the Securities and Exchange Commission (SEC), revealing the company waived for the first six months millions in rents to mall tenants in Macao and Singapore. The total amount of rents waived to support its tenants is $170 million and accounts for most of the decline in mall revenue for the group during the first six months of 2020.
Las Vegas Sands announced its second quarter financial results last week, posting a net loss of $985 million for the period, a huge drop from the $1.1 billion in net profit for the same period in 2019.
Malls Are Important for the Overall Customer Experience
During the conference call after the announcement, company’s CFO Patrick Dumont outlined the group was working with tenants in its malls to help them weather the storm.
“We view the mall as a very important asset, very important for our customers’ experience. We have relationships with some of the leading brands in the world and in Asia. And we want to ensure the continuity of those relationships.”Patrick Dumont, CFO, Las Vegas Sands
Besides gaming properties in Nevada, LVS runs multiple resorts in Macao among which the Shoppes mall at the Venetian Macao, as well as the Marina Bay Sands casino resort in Singapore. LVS posted a drop in mall revenue of $124 million year-on-year for the second quarter, a period during which casinos in Singapore were closed until June 19, while closures in Las Vegas were effective until June 4.
Rent concessions in the Special Administrative Region (SAR) of China amounted to $78 million for the quarter. Though casinos in Macao have been closed for 15 days in February, other properties and venues inside properties such as shopping malls in resorts remained open.
The dropping number of arriving tourists due to the imposed travel and visa restrictions from mainland China were hurting mall tenants almost throughout the quarter, as it was not until recently that Guangdong removed the mandatory 14-day quarantine for arrivals from Macao.
Indeed, Macao is seen as a key jurisdiction to spur recovery for the group, the earnings conference call showed, but company’s executives believe further travel and visa easing should take place before recovery to pre-closure levels begins.
$33 million of the total amount of mall rent waived by LVS in the first half of 2020, $111 million, is attributed to tenants in the Marina Bay Sand resort in Singapore, which has been closed since April 7. The casino in the complex reopened to select customers only July 1, while the resort started re-opening July 17.
The rent waiver Las Vegas Sands gave its mall tenants is another example of the relations the company has with its business partners and employees. The Las Vegas-based casino operator was the first to announce it would pay in full to its employees throughout the whole period of property closures.