Las Vegas Sands second quarter results exceed analyst forecasts
Integrated resorts operator Las Vegas Sands Corp. has released its financial results for the second quarter 2023.
The company recorded a substantial rebound as a result of increased travel and tourism in both Macao and Singapore. Robert G. Goldstein, Chairman and Chief Executive Officer of Las Vegas Sands, expressed satisfaction with the positive trend and remains optimistic about the prospect of welcoming more guests back to their properties throughout the rest of 2023 and beyond.
Highlights of second quarter
Las Vegas Sands, in its second quarter 2023 report, shows promising signs of recovery in travel and tourism spending in both Macao and Singapore during the quarter. The company achieved net revenue of $2.54 billion and net income of $368 million, showcasing a positive financial performance. Notably, the consolidated adjusted property EBITDA reached $973 million, marking the strongest financial performance since 2019. Marina Bay Sands contributed significantly, with adjusted property EBITDA reaching $432 million, while Macao reported impressive adjusted property EBITDA of $541 million. Moreover, the company announced the resumption of its Return of Capital Program, reinstating the quarterly dividend at $0.20 per share, further indicating its confidence in the future.
Gaming revenue in Singapore reached an all-time high
Marina Bay Sands in Singapore demonstrated exceptional performance across all segments, with gaming revenue reaching an all-time high. The company is eager to extend its new suite product and enhanced service offerings to more customers and benefit from the recovery of travel and tourism spending, particularly from China and the broader region.
Similarly, in Macao, Las Vegas Sands witnessed ongoing recovery in all gaming and non-gaming segments during the quarter. The company will continue to invest in Macau’s leisure tourism sector to benefit from the market rise in the travel and tourism sector.
Looking ahead, Las Vegas Sands reiterates its unwavering dedication to making industry-leading investments in its team members, communities, and Integrated Resort property portfolio. This commitment places the company in an advantageous position to deliver strong growth in the coming years. Its robust financials are supported by ongoing investment and capital expenditure programs in both Macao and Singapore.
Quarterly dividend reflects commitment to stockholders
Las Vegas Sands Corp. has resumed its capital return program, reinstating the quarterly dividend at $0.20 per common share. Stockholders can expect to receive the next dividend on 16 August.
In terms of financial performance, the company saw a significant boost in net revenue, amounting to $2.54 billion compared to $1.05 billion in the same quarter last year. Operating income also experienced a remarkable turnaround, reaching $537 million, in stark contrast to the operating loss of $147 million in the prior year quarter.
Furthermore, net income from continuing operations for the second quarter of 2023 showed impressive growth at $368 million, compared to a net loss of $414 million during the same period in 2022. The company’s consolidated adjusted property EBITDA soared to $973 million, surpassing the $209 million reported in the previous year’s quarter.
Las Vegas Sands- a significant boost in financial performance. (Source: SiGMA)
Sands China records a remarkable turnaround
Consolidated financial results showcased substantial growth on a GAAP basis. Total net revenues for SCL surged to $1.62 billion, marking a remarkable increase compared to the $368 million reported in the second quarter of 2022. The company also reported a noteworthy improvement in net income, with a positive figure of $187 million. This impressive turnaround contrasts sharply with the net loss of $422 million recorded during the same period in 2022.
Las Vegas Sands Portfolio of properties. (Source – SiGMA)
Income tax rate was lower
Interest expense, after considering amounts capitalized, amounted to $210 million during the second quarter of 2023, reflecting an increase from the $162 million reported in the same period of the previous year. This rise is attributed to a higher weighted average borrowing cost, which stood at 5.4 percent in the second quarter of 2023 compared to 4.3% in the second quarter of 2022.
Moreover, the effective income tax rate for the second quarter of 2023 was notably lower at 11.8 percent, compared to the 36.2% recorded in the prior year quarter. The significant difference in the income tax rate for the second quarter of 2023 is mainly attributable to the application of a 17% statutory rate on our Singapore operation.
Healthy financial position
The company reported unrestricted cash balances amounting to $5.77 billion, indicating a healthy financial position. In terms of borrowing capacity, the company has access to $3.67 billion through available credit facilities in the United States, Sands China Ltd. (SCL), and Singapore. This amount considers outstanding letters of credit. The total outstanding debt, excluding finance leases and financed purchases, stood at $14.70 billion as of June 30, 2023. During the second quarter of 2023, a substantial repayment of $1.20 billion was made on the SCL for a credit facility, indicating a proactive approach towards managing debt obligations.
During the second quarter, the company invested a total of $196 million in capital expenditures, covering a wide range of activities such as construction, development, and maintenance efforts.
A substantial portion of $144 million was allocated specifically for capital expenditures at Marina Bay Sands, signifying the company’s dedication to enhancing the property and ensuring it remains at the forefront of excellence. Furthermore, $42 million was strategically directed to capital expenditures in Macao, indicating the company’s continuous efforts in implementing development and improvement initiatives within the region. The company also channeled $10 million towards capital expenditures in the Corporate and Other category, reaffirming its commitment to strengthening its overall infrastructure and operations across various sectors.
Non-GAAP measures
The company’s second quarter 2023 press release emphasizes the use of specific non-GAAP financial measures alongside GAAP measures to supplement consolidated financial information. These non-GAAP metrics, including “adjusted net income (loss),” “adjusted earnings (loss) per diluted share,” and “consolidated adjusted property EBITDA,” were deemed essential by the company to assess financial performance and provide valuable insights to investors about the company’s financial condition, results, and cash flows. Widely used by industry analysts and investors, these measures offer a consistent basis for evaluating the company’s operating performance over time. The company ensures transparency by providing reconciliations of non-GAAP measures to the most comparable GAAP financial measures in their financial schedules and presentations. The non-GAAP measures allow for a focused view of casino operations by excluding certain unrelated expenses. Additionally, “hold-normalized” adjusted property EBITDA and earnings are presented to account for variations in table games’ win percentages, ensuring a consistent assessment of property performance. To further evaluate financial performance, “adjusted property EBITDA margin” and “hold-normalized adjusted property EBITDA margin” are utilized, calculated using the aforementioned non-GAAP measures.
Las Vegas Sands Corp. remains at the forefront of the travel and tourism industry, poised to capitalize on the resurgence of the global market .
Las Vegas Sands trades on the New York Stock Exchange as (NYSE:LVS) 56.44 USD?3.22 (5.40 percent)
