Las Vegas Sands (LVS) Still Riding High on Strong Asian Numbers
On Wednesday, Las Vegas Sands LVS, the U.S. casino company best known for its Macau and Singapore properties, posted strong earnings and declared its first common stock dividend. Las Vegas Sands' fourth quarter earnings, excluding one-time charges, came in at 57 cents per share, a 17% increase over the prior year quarter which matched analysts' expectations. Revenue rose 26% to $2.54 billion, topping the consensus estimate of $2.47 billion. EBITDA cash flow also increased 30% to $960.5 million, beating the forecast of $884.4 million.
The company unsurprisingly attributed most of its growth to its budding properties in Macau and Singapore, whose numbers received a strong boost from visitors during Chinese New Year at the end of January. Daily Chart
Cash flow at the company's Macau properties, which currently include the Four Seasons Macao, Sands Macao and the Venetian Macao, rose 27% on a larger volume of VIP and mass-market players. Macau, a special administrative region of China 40 miles west of Hong Kong, is the only city in the country with legalized gambling. As such, the city's total gambling revenue surged 42% last year to 268 million patacas, or $33.5 billion. Macau's gambling revenue surpassed that of the Las Vegas Strip in 2006, claiming the title of largest casino revenue hub in the world. Las Vegas Sands, through its Hong Kong-based subsidiary Sands China, is also developing additional properties on the Cotai Strip, a new cluster of mega-casinos that mirrors the development of the new Las Vegas Strip in the 1990s. The company's Venetian and Four Seasons resorts were two of Cotai's first tenants. The company's current projects at Cotai include the Far East Consortium, which is a combination of three tiered pricing hotels, and Sands Cotai Central, the Cotai branch of its flagship Sands Macao casino. The Sands Cotai is on track to open in eight weeks. Cash flow at its flagship casino in Sinagpore, the Marina Bay Sands, rose 40% to an all-time record. Revenue jumped 44% to $806.9 million. Las Vegas Sands enjoys an exclusive contract with the government, which has only authorized two companies - Sands and Malaysia's Genting Group - to develop within the city state. Marina Bay Sands has evolved from a casino into a massive entertainment complex, complete with theaters, nightclubs and high-end boutiques, and remains one of the top tourist attractions in Sinagpore. The company has been in talks with the government for permission to build an additional 1,000-1,500 room hotel next to the complex, which would boost gambling, shopping and entertainment revenue significantly. CEO Sheldon Adelson has expressed strong interest in expanding further in Asia, possibly to Korea, Taiwan, Vietnam and Japan. Back in the United States, casinos in Las Vegas posted a 9% increase in revenue, signaling a slow recovery from a record drop in gamblers and trade shows. The company's main Vegas properties - the Venetian and the Palazzo - reported flat EBITDA at $80.9 million, with a 9.3% increase in revenue to $339.5 million. Meanwhile, its lesser-known property in Bethlehem, Pennsylvania, posted a 25.9% increase in revenue to $105 million. Adelson has also been reportedly surveying potential projects in Florida, a potentially hot market for casinos rich with wealthy retirees. Las Vegas Sands also declared its first ever annual dividend of $1 per share for holders of common stock, as well as an interim dividend of 58 Hong Kong cents (7.5 cents) per share for its Sands China shareholders. Adelson stated the decision was due on the fact that the company's growth in Asia was outpacing its capital needs. Shares of Las Vegas Sands currently trade at 19.5 times forward earnings. Analysts have an average one-year price target of $58 on the stock. Other News About LVS Las Vegas Sands profit jumps to $320.1M in 4Q
Las Vegas Sands posts strong numbers on Asian revenue. Las Vegas Sands' CEO Discusses Q4 2011 Results
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Published on Feb 3, 2012
By Leo Sun