Sands China EBITDA Rises On Q3 Net Sales Decline
Total net income of Sands China fell 0.4% to $2.33 billion in the third quarter of 2014, compared with $2.34 billion in the third quarter of 2013, parent Las Vegas Sands Corporation said on Wednesday.
In the third quarter of 2014, however, Sands China’s adjusted real estate earnings before interest, taxation, depreciation and amortization (EBITDA) were $811.6 million, up 3.3% from $785.3 million a year earlier. Sands China’s net profit rose 4.3% to $644.6 million, compared with $617.9 million a year ago.
Analysts noted increased competitive pressure in Macau’s premium mass sector and declining margins in that sector.
In the earnings call, the management also mentioned “everything going on in Hong Kong,” a commentary on recent protests in Hong Kong.
Karen Tang, of Deutsche Bank AG in Hong Kong, said in a note: “In the [earnings] release, management noted that competitive pressure from premium mass is undeniably increasing and likely to grow further. On the management slide, premium mass margins were revised down from 35%-45% in Q2 to 25%-40% in Q3 (basic mass margins following labor cost inflation were revised down to 40%-50% in Q3 from 45%-50% in Q2).”
Kenneth Fong, of Credit Suisse AG in Hong Kong, noted: “The management outlook is optimistic given strong pulverized bulk segment performance, minimal impact from the enforcement of smoking bans, and a gradual recovery in the VIP market. However, as revenue slows, management sees margin risk for the premium bulk segment. So far, we have not found a significant increase in public market publicity through channel checks.”
Cameron McKnight, of Wells Fargo Securities LLC in New York, said in a comment: “Management said they didn’t think the smoking ban was a problem, but noted that it was likely that the corruption campaign [in mainland China] would continue.”
Sheldon Adelson (pictured), chairman of Sands China and parent Las Vegas Sands, said on an earnings conference call that the company has continued to execute its strategic goals during the quarter “despite some obvious challenges in the Asian VIP gaming sector.” 슬롯사이트 순위
“I’ve experienced periodicity in Macau in the past, and it’s also periodic that the environment is weak in Macau now, and I think it’s only a matter of time before the cycle turns around,” he added