Q124 LVS earnings

earnings summary

Here is a summary and analysis of the key points from the Q1 2024 earnings call:

Earnings Results and Guidance:

• Sands China (SCL) EBITDA was $610 million, with a 34.4% adjusted margin (up 380 bps YoY)
• Marina Bay Sands (MBS) in Singapore delivered record EBITDA of $597 million, with a 49.1% adjusted margin (up 180 bps YoY)
• MBS is expected to sustain $500 million+ in quarterly EBITDA going forward as renovation benefits are realized
• SCL margins are expected to reach the mid-to-high 30% range once Londoner renovation and Cotai Arena are completed in 2024-2025

Market Conditions and Trends:

• Macao gaming revenue reached a $28 billion annual run rate in Q1, with confidence it will grow to $30B, $35B and $40B+ in coming years as visitation recovers
• Mass gaming revenues grew slightly faster than VIP in Macao in Q1
• Singapore is benefiting from strong tourism, entertainment/events, and wealthy customer demand. Visitation and hotel constraints are limiting further near-term growth.

Key Themes:

• Investing heavily in renovating and expanding Londoner and MBS properties to drive long-term cash flows, margins and returns
• Focused on premium product and service to drive high-value visitation over promotional activity
• Potential interest in Thailand and New York opportunities, but still early. Japan taking longer than expected.
• Committed to investment grade ratings and 2-3x leverage target. Generating significant cash flow for capital returns (buybacks and dividends) and growth investments

Sentiment: Positive The tone of management was confident and optimistic about the long-term growth potential in both Macao and Singapore as their property investments are completed. Near-term disruption from construction in Macao is seen as temporary. Cash flows are strong, enabling capital return and reinvestment for growth. Macao market commentary was particularly bullish.