Adelson defends Macau even as troubled market crimps Sands’ earnings
Las Vegas Sands Corp. said Wednesday its Macau business was more than just gaming.
The troubled market, which has experienced seven straight monthly gaming revenue declines, hurt Las Vegas Sands’ fourth-quarter earnings.
But company Chairman Sheldon Adelson spent much of the casino operator’s quarterly conference call defending the market.
“Everything we have invested in Macau to date and everything we will invest in the future is predicated on delivering our promise to help Macau in its economic diversification,” Adelson said.
Las Vegas Sands’ net revenue from its four resort developments in Macau declined 16.2 percent to $2.12 billion in the quarter that ended Dec. 31. Companywide, revenue fell 6.6 percent to $3.42 billion.
But Las Vegas Sands said its net income for the quarter was $721.3 million, a 25 percent increase compared with the same period a year ago. Earnings per share of 90 cents was a 28.6 percent increase over the 2013 fourth quarter.
For all of 2014, Las Vegas Sands said its net profit was $2.84 billion, a 20.3 percent increase. Overall revenue increased 5.9 percent to $14.58 billion.
Macau’s casino industry has suffered since June. A crackdown on corruption by the Chinese government has focused on junket operators who bring high-end baccarat gamblers to the casino’s ultraexclusive private gambling rooms. Several operators have been linked to Chinese organized crime triads.
In prepared remarks, Adelson told analysts the market is moving beyond gaming, an aspect Las Vegas Sands realized early on and will help the company weather any gaming downturn.
“While it has become fashionable for everyone to talk about Macau’s diversification from gaming, we have consistently been delivering on all aspects of diversification over the past decade,” Adelson said.
He said visitation to Macau from mainland China increased 14 percent in 2014, providing customers for Las Vegas Sands’ 9,300 hotel rooms, restaurants and other nongaming attractions, including shows, dining and convention space.
He said the company’s nongaming revenue in Macau was higher than the five other Macau gaming operators combined.
“I don’t believe any of these unique competitive advantages can be matched by our competition,” Adelson said. “I have every confidence in our ability to continue to grow over the long term.”
The quarterly earnings call was almost entirely focused on Macau. However, Las Vegas Sands reported a 27.1 percent increase in overall revenue from its Marina Bay Sands in Singapore. Revenue from The Venetian and Palazzo on the Strip declined 6 percent in the quarter.
Las Vegas Sands has the largest holdings of the three Nevada-based companies that operate in Macau. Las Vegas Sands holdings in Macau include The Venetian Macau, Sands Macau, Four Seasons Macau and the multihotel Sands Cotai Central complex.
The company is expected to the St. Regis hotel tower at the Sands Cotai site this year and is developing the $2.7 billion Paris-themed Parisian on Cotai that is expected to open in 2016.
“We will have invested in excess of $13 billion, an investment that reflects our unrivaled commitment to Macau’s diversification and to its future success,” Adelson said.
