Sands China delivered a ‘decent’ set of first-quarter 2026 results despite weaker EBITDA margins, according to a CreditSights report, which maintained a Market Perform recommendation on the company’s U.S. dollar bonds.
CreditSights, part of the Fitch Group, said the results reflect a strategy prioritizing revenue growth over margins, noting that while margin pressure had been expected, ongoing customer-focused investments and reinvestment programs continued to support market share gains and topline growth.
The firm added that it ‘continue[s] to view the company as a solid hold for investors comfortable playing the Macau gaming space.’
Total net revenue rose 24 percent year-on-year to $2.1 billion in the quarter, driven primarily by strong performance across its casino portfolio, particularly at The Londoner Macao and Four Seasons Macao.
Adjusted property EBITDA increased 18 percent year-on-year to $633 million. However, EBITDA margin declined by 140 basis points year-on-year to 29.9 percent, reflecting higher operating costs tied to service-level investments and additional staffing.
CreditSights attributed the margin compression to ‘higher operating costs from ongoing service-level investments and additional staff hiring,’ alongside intensified competition in the premium segment. The report added that margins are expected to ‘continue trending marginally lower’ in the near term as Sands China focuses on revenue growth and market share expansion.
Despite this, the company’s customer reinvestment program continued to gain traction, lifting its mass market revenue share to 25.7 percent in 1Q26, the highest level in two years. Gross gaming revenue market share was also estimated to have improved to 25.9 percent during the quarter.
Casino operations remained the primary revenue driver, accounting for 78 percent of total net revenue, while hotel occupancy stayed near full capacity at around 98 percent across the portfolio. Retail performance was also strong, with tenant sales rising 37 percent year-on-year to a record quarterly level.
On the balance sheet, Sands China showed further improvement. Total debt edged down to $6.89 billion as of March 31st, 2026, while leverage metrics improved to 2.9x on a gross basis. Capital expenditure declined 55 percent year-on-year to $89 million, supporting positive free cash flow during the quarter. The company also repaid HK$2.4 billion ($307 million) of its revolving credit facility in April, which CreditSights expects will further strengthen debt metrics in the second quarter.
CreditSights expects continued revenue growth supported by service enhancements and customer-focused initiatives, although margin pressure is likely to persist amid competitive dynamics in Macau’s premium gaming segment.
