Land-based gaming giant Las Vegas Sands was able to significantly reduce its net loss in the first half of its financial year after the reopening of its casino properties led to a 60.2% year-on-year rise in revenue.
Total revenue for the six months to June 30 amounted to $2.37bn, up from $1.48bn in the same period last year, during which the operator was hit by casino closures as a result of the novel coronavirus (Covid-19) pandemic.
In 2020, Sands’ casinos in Macao closed for a short period in February, while its Las Vegas properties shut between March 18 and June 4, and its Singapore Marina Bay Sands facility from April 7 to June 30.
However, this year, only Marina Bay Sands closed between May 17-19, while all of its other casinos remained open, albeit with certain restrictions of capacity and social distancing in the properties.
Certain travel restrictions also remain in place due to Covid-19, with tourism and travel to Macao and Singapore currently limited, reducing the number of visitors to Sands’ casinos in the respective markets.
Breaking down its H1 performance, $1.71bn in revenue came from casino gambling, up 59.5% on last year, while mall revenue more than doubled to $304m. Rooms revenue hiked 44.5% to $211m, food and drink revenue climbed by 51.4% to $106m, though convention, retail and other revenue dipped 14.9% to $40m.
H1 also saw Sands agree to sell all of its Las Vegas properties and operations, in order to shift its focus to Asia. The operator will sell the subsidiaries that operate its US business to funds held by the private equity business Apollo Global Management for $1.05bn in cash and $1.20bn in seller financing, through a loan credit and security agreement.
Meanwhile, the Venetian’s real estate and related assets will be sold to VICI Properties, a real estate investment trust that was spun off from Caesars in 2017, for $4.00bn in cash. Sands expects the deal to complete in the fourth quarter of this year.
“We remain enthusiastic about the opportunity to welcome more guests back to our properties as greater volumes of visitors are eventually able to travel to Macao and Singapore,” Sands chairman and chief executive Robert Goldstein said.
“We also remain deeply committed to supporting our team members and to helping those in need in each of our local communities as they recover from the impact of the Covid-19 pandemic.
“We remain confident in the eventual recovery in travel and tourism spending across our markets. Demand for our offerings from customers who have been able to visit remains robust, but pandemic-related travel restrictions in both Macao and Singapore continue to limit visitation and hinder our current financial performance.”
Looking at spending in H1 and operating costs were 16.8% higher at $2.60bn, but the rise in revenue in the period meant adjusted property earnings before interest, tax, depreciation and amortisation (EBITDA) reached $488m, compared to a $76m loss in 2020.
After taking into account other spending, including $312m in interest expenses, the operator’s loss from continuing operations before tax was $552m, an improvement on $942m in the first half of last year.
Sands paid $8m in tax, leaving a net loss from continuing operations of $560m. After also noting a $24m loss from discontinued operations in Las Vegas, net loss was $584m.
However, the operator did benefit from $114m in income from non-controlling interests, which left it with a total net loss of $470m for the half, compared to $821m in 2020.
“Our industry-leading investments in our team members, our communities, and our market-leading Integrated Resort offerings position us exceedingly well to deliver growth as these travel restrictions eventually subside and the recovery comes to fruition,” Goldstein said.
“We are fortunate that our financial strength supports our investment and capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets.”
Sands also published its results for the second quarter, during which revenue was 1,791.9% higher at $1.17bn, as a result of its casinos operating for almost all of the period.
Operating costs were up 60.8% year-on-year to $1.31bn, while adjusted property EBITDA jumped from a loss of $425m in 2020 to $244m.
Loss from continuing operations before tax was reduced from $872m to $286m, while after a $6m tax benefit, net loss from continuing operations improved from $841m to $280m.
When taking into account $38m in income from discontinued operations in Las Vegas and $50m in income from non-controlling interests, total net loss for the quarter was $192m, compared to $820m last year.
Last week, Sands also announced that it is to launch a new programme to invest in online gambling suppliers, as it seeks to make a foray into the igaming sphere.
Sands plans to build a “digital gaming investment team” focused on business-to-business opportunities, led by Davis Catlin, a senior managing director of Sands Capital, which pursues the operator’s investments.