Las Vegas Sands (NYSE:LVS) recently reported its Q2 2013 earnings. The company attracted a record number of tourists and saw a 26% jump in revenues to $3.24 billion led by accelerated growth in Macau.  While the Singapore operations witnessed moderate growth, the win percentage was lower than expected. Singapore’s GDP has increased by 15% in the April-June quarter on an annualized basis.  Las Vegas Sands’ Macau operations contribute close to 60% to its value and given how quickly the Macau gaming market is growing, the company plans to continue to expand in this region. The company’s new project – The Parisian Macau will be operational by late 2015 and will enhance its capacity in the region. 
Business As Usual In Macau
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Las Vegas Sands’ Macau revenues jumped 40% to $2.07 billion due to a 61% surge in mass table wins.  The company’s Macau properties attracted more than 14 million visitors during the quarter ended June 30, 2013.  While Macau’s gaming revenues were up 15% in Q2 2013, Las Vegas Sands witnessed a 26% increase in gaming revenues as it has established a critical mass in the market with its diverse properties and resorts, which is aiding its growth.  The company reported a 53% jump in earnings (before interest, taxes, depreciation and amortization) from its Macau operations. The company’s VIP market share was approximately 17.4% of Macao market rolling value. Sheldon Adelson pointed out that the macro view about China is not affecting Macau and that consumer behavior is going in the right direction as there are more people coming in and spending more money.  With increased visitation, we expect mass-market table games in Macau to continue to drive growth for the company.
Growth In The Singapore Operations
Las Vegas Sands’ Singapore revenues were up 6.4% while earnings were up 7.5%.  Growth in Singapore’s economy during the second quarter of 2013 helped the company’s rolling volume to grow by 24% compared to last year’s second quarter. Singapore’s economy in Q2 2013 grew at the fastest pace in more than two years on strengthened services and a rebound in manufacturing.  While there has been a decline in visitation from Singaporeans, it has been more than offset by increased visitation from non-Singaporeans including Indonesians, Malaysians and Chinese. Singapore’s government has imposed certain restrictions to prevent the spread of organized crime and social ills that often plague the casino gaming cities. While the company is focusing on attracting tourists and visitors from nearby Asian countries, going forward, we expect that growth in LVS’ Singapore operations will remain moderate due to measures taken by the government.
We are currently in the process of updating our model for Las Vegas Sands in view of the recent earnings.Notes:
- Las Vegas Sands’ SEC Filings [↩] [↩] [↩] [↩]
- Singapore’s GDP Growth Improved in the Second Quarter of 2013, Ministry Of Trade And Industry, Jul 12, 2013 [↩]
- Las Vegas Sands Corp. (LVS) CEO Discusses Q2 2013 Results – Earnings Call Transcript, Seeking Alpha, Jul 24, 2013 [↩] [↩]
- MACAU HITS NEW QUARTERLY REVENUE HIGH THANKS TO MASS MARKET SURGE, Calvin Ayre, Jul 18, 2013 [↩]
- Singapore’s GDP Surprise, The Diplomat, Jul 16, 2013 [↩]