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as Vegas Sands Corp. has suffered losses throughout July and August in its China subsidiary Sands China Ltd. operating in the Macao market. The news comes from a Securities and Exchange Commission filing Wednesday, and is the result of border restrictions imposed by the local government.
While net revenues in the region for SCL totaled $265 million and $148 million in July and August respectively, an increase of 516.3% and 179.2% from the same months 2020, the situation for the casino operator is still heavily conditioned by the pandemic.
The company saw an operating loss of $25 million and a net loss of $63 million in July; and an operating loss of $83 million and a net loss of $125 million in August 2021. Additionally, August saw an adjusted property EBITDA loss of $14 million.
Despite the setbacks, the company believes it is able to support continuing operations, complete the major construction projects that are underway, and respond to the current COVID-19 pandemic challenges.
“SCL has taken various mitigating measures to manage through the current environment,” states the company in its report. These include a cost and capital expenditure reduction program to minimize cash outflows for non-essential items.
From the end of July and for most of August, tighter border restrictions were implemented in Macao. This not only affected visitation to SCL’s properties but the Macao gaming industry at large.
Monthly gross gaming revenue and total visitation from mainland China decreased by 65.5% and 71.8%, respectively, in July 2021, as compared to pre-pandemic levels from the same period in 2019; while in August 2021, monthly gross gaming revenue decreased by 81.7% versus 2019.
The tightening of the border restrictions in Macao is unpredictable, as it is dependent on the number of new COVID-19 cases both in Macao as well as mainland China. The pandemic has materially adversely affected the number of visitors to SCL’s facilities in a sustained way since it started, thus disrupting the company’s operations.
“SCL continues to look forward to the opportunity to welcome more guests back to SCL’s properties as greater volumes of visitors are eventually able to travel to Macao,” said the company. “Demand for the SCL’s offerings from customers who have been able to visit remains robust, but pandemic-related travel restrictions and the evolving COVID-19 situation in Macao and mainland China continue to limit visitation and hinder SCL’s current financial performance.”
Restrictions have included travelers from Guangdong being required to submit a negative nucleic acid test certification issued within 48 hours, which tightened to 12 hours for a period, and then eased to the more relaxed seven-day requirement near the end of August. SCL expects the adverse impact of restrictions to continue “until the COVID-19 pandemic is contained.”
Hong Kong-listed Sands China Ltd. counts with five properties in Macao: The Venetian, The Plaza, Sands Macao, The Parisian Macao, and The Londoner Macao, which opened its first phase earlier this year. Las Vegas Sands has gradually exited the city it was named after in order to focus on the Asian market.
Original article: https://www.yogonet.com/international//noticias/2021/09/10/59245-sands-china-reports-losses-in-july-and-august-due-to-macaus-border-restrictions
