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HomeNewsMacauLVS Macau poor results possibly one-off event as ongoing renovation projects are finished - Analysts

LVS Macau poor results possibly one-off event as ongoing renovation projects are finished – Analysts

While Las Vegas Sands (LVS) 2024 Q4 results highlighted a mixed performance across regions—with Macau struggling under renovation impacts and market share losses—its Singapore operations continued to thrive, brokerage analysts indicated, showcasing the potential for recovery and growth in the coming months.

LVS reported adjusted EBITDA of $571 million for its Macau operations, representing a 12.7 percent decline year-over-year and a 2.4 percent decline quarter-over-quarter.

In contrast, net revenue for the region reached $1.77 billion, down 5 percent year-over-year but flat compared to the previous quarter. The overall gross gaming revenue (GGR) for Macau also experienced a dip, decreasing 4 percent year-over-year to $1.6 billion.

Jefferies analysts highlighted that the company’s EBITDA was impacted by a $22 million loss due to luck factors, which detracted from overall performance.

The reported EBITDA margin for Macau was 32 percent, with the margin for properties excluding the Londoner at 35.1 percent, showing a decline of 2.3 percentage points year-over-year.

The ongoing renovation of the Londoner, which is expected to be completed by May 2025, has significantly affected Sands China’s market share in Macau. The project has led to a 20 percent reduction in available rooms, contributing to a loss of approximately 180 basis points of GGR share, primarily in the VIP segment.

As the renovations progress, management anticipates the introduction of 2,090 additional suites and rooms in phases throughout the first half of 2025, which is expected to help regain market share later in the year.

Comments from CBRE suggest that the quarterly decline in Macau performance may be a one-off situation.

The agency noted that LVS reported adjusted property EBITDA of $571 million in Macau, which was below the consensus estimate of $620 million. On a hold-normalized basis, Macau EBITDA declined about 9.3 percent to $593 million, impacted significantly by the ongoing renovations at the Londoner.

Management pointed out that only 315 Londoner Grand rooms and suites were operational during Q4, compared to 2,405 once the renovations are fully completed in Q2 2025.

According to CBRE, Excluding the Londoner, margins across the Macau portfolio fell by 230 basis points year-over-year on a hold-normalized basis.

The margin at the Venetian Macao also declined by 370 basis points year-over-year, partially due to reduced visitation linked to a visit from President Xi Jinping in December of last year.

Seaport Research analyst Vitaly Umansky noted that while Sands China faced difficulties in Macau, particularly due to reduced room availability and a weak VIP market, the overall results were better than anticipated.

He emphasized that the current valuations for LVS appear attractive, positioning the company for potential growth as renovations conclude and market conditions stabilize.

As Sands China prepares to announce its full set of results in February 2025, the market will be keenly watching how the completion of renovations at the Londoner and ongoing developments in Singapore influence overall performance.

In contrast to the challenges faced in Macau, LVS’s operations in Singapore exceeded expectations.

The Marina Bay Sands property has been a standout, reporting a 43.3 percent increase in average daily rate (ADR) to $927 in Q4 2024, following a 32.6 percent increase in the previous quarter.

The capital program at Marina Bay Sands, valued at $1.75 billion, is set to be completed by May 2025, further enhancing its capacity and attractiveness to high-value guests.

‘Marina Bay Sands continues to be a growth engine and cash cow for LVS’, CBRE analysts pointed out

Nelson Moura
Nelson Mourahttp://agbrief.com
Editor and reporter with 10 years of experience in Greater China, namely Taiwan and Macau, in printed and online media, with a focus on finance, gaming, politics, crime, business and social issues.

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