Growth was apparent across both Macao and Singapore for Sands in 2023. However, it was the former that reported the most growth, with revenue rocketing 303.1% to $6.56bn.
Throughout 2023, Sands continued to highlight the extent of growth in Macao. This came in the wake of all remaining Covid-19 measures being dropped in the region. As such, players were able to come and go as they pleased, while casinos were not hindered by capacity limits.
Looking ahead, Sands CEO and chairman Rob Goldstein said the operator is of the view that the Macao market will continue to grow. He referenced wider forecasts that the market could hit a value as high as $40.00bn.
“It’s only been one year since the end of Covid in Macao,” Goldstein said. “We began in Q1 with $400.0m of EBITDA. In Q2, we did $540.0m, and Q3 we did $630.0m, the growth just keeps coming. We look forward to continued growth in both gaming and non-gaming revenue, which will lift in our market.
“There is an ongoing speculation of the future growth of Macao. Can Macao market grow to $30.00bn, $35.00bn, even $40.00bn and beyond? We believe that it will. This underscores our confidence in the returns that we generated by capital investment programs in our portfolio.”
Goldstein also referenced the ongoing $1.20bn reinvestment programme at its Londoner site in Macao. He said this will help drive further growth in the region.
“Sands China continues to own the largest share of non-rolling table win, rolling table win and slot ETG win. Most importantly, we have the largest share of EBITDA in Macao market by a wide margin. We believe the completed Londoner will need and perhaps even exceed the earning power of the nation.”
Macao revenue hits $6.56bn in 2024
Breaking down Sands’ performance in the full year, of the $10.37bn revenue posted, some $7.52bn came from gaming operations. A further $1.20bn was attributed to rooms, $584m food and beverage, $767m mall, and $295m convention retail and other.
Revenue from Macao operations amounted to $6.56bn, up from $1.63bn in the previous year. The stand-out venue in the region was the Venetian Macao, where revenue hiked 293.3% to $2.68bn. Meanwhile, revenue at the Londoner was 412.0% higher at $1.79bn.
Turning to Singapore and revenue was up 53.0% to $3.95bn. All revenue in Singapore came from the Marina Bay Sands venue in the city centre. Sands also noted $224.0m in inter-company royalties for the year.
Net profit down despite revenue growth at Sands
In terms of spending, total operating expenses were 64.4% higher at $8.06bn. This was driven by an 85.2% jump in resort operation costs, with Macao now fully open again.
A further $818m was noted in interest expense, only slightly offset by $288m in interest income. This left a pre-tax profit of $1.78bn from continuing operations, in contrast to a $1.39bn loss in 2022.
Sands paid $344m in tax, which resulted in a $1.43bn net profit, compared to the previous year’s $1.54bn loss.
However, there were other factors that impacted year-on-year bottom line comparisons. In 2022, Sands noted a $2.86bn gain on the disposal of discontinued operations. There was also a $475m gain on non-controlling assets.
For 2023, Sands made no such disposal, and it posted a $210m loss from non-controlling assets. This pushed net profit down slightly to $1.22bn, with this being 33.4% lower than in 2022.
Despite this, adjusted property EBITDA for the full year was 458.1% higher at $4.09bn.
Revenue tops $2.92bn in Q4
In terms of the final quarter of the year, figures for Q4 follow a same pattern as the full year.
Revenue was 161.0% higher at $2.92bn. Casino revenue reached $2.11bn, rooms $323m, food and beverage $161m, mall $232m and convention retail and other $88m.
Q4 Macao revenue hiked 319.6% to $1.86bn and Singapore revenue increased by 55.6% to $1.06bn.
Cost-wise, operating expenses jumped 71.9% to $2.21bn, while after accounting for other, finance costs, pre-tax profit from continuing operations was $592m, compared to a $287m loss in 2022.
Sands paid $123m in tax, leaving a net profit of $469m, a significant improvement on the $269m loss in Q4 of the previous year.
After also accounting for an $87m loss from non-controlling interests, bottom line net profit in Q4 reached $382m. This was again better than the previous year’s $169m loss, shortened by $105m in income from non-controlling interests.
“We were extremely pleased with our financial and operating results for the quarter, which reflect the ongoing improvement in the operating environment in both Macao and Singapore,” Goldstein said.
“We remain deeply enthusiastic about our opportunities for growth in both Macao and Singapore in the years ahead.”
New York plans advance for Sands
Away from its core Asian market, Goldstein also referenced expansion plans for Sands in the US. This time last year, Sands set out proposal to open a new land-based casino in the state, just days after an application process for new licences opened.
Goldstein referenced this in an investor call held after the results were posted. He said that should Sands secure the licence, it intends to begin work on the new $6.00bn facility straight away.
“We’re receiving strong local support,” Goldstein said. “The cost of the building will be in the $6.00bn range, which enables us to develop a true five-star resort with unlimited people.
“This is a massive opportunity. We are very enthused about the prospect. Our bid is compelling. If we receive the licence, we’d be in the ground as quickly as possible.”
Could Sands also target Texas?
Aside from New York, there is talk of Sands exploring options in Texas. While gambling has not yet been legalised in the state, chief operating officer Patrick Dumont said that there is potential for Sands to open a casino.
Incidentally, Miriam Adelson, widow of Sands founder Sheldon Adelson, in November sold $2.00bn of stock in the business to help fund the purchase of a majority interest in the Dallas Mavericks. The NBA team is also based in Texas.
“In terms of Texas, I think the most important thing is that Sands is actively trying to facilitate the development of integrated resorts in Texas and through the liberalisation of gaming,” Dumont said.
“We are very excited about it. We think it’s an unbelievable market. Over time, we hope that it happens. I can’t tell you when it’s going to be, but we’re very focused on it as a company and we like the opportunity to develop some very unique tourism assets, specifically in Dallas.
“We think that’s a great market. We’ve been very focused on it. And we think the opportunity there would be a great one.”
Changing of the guard in China
Meanwhile, Sands has announced a series of changes to the leadership team at Sands China.
Goldstein will step down as CEO but remain chair of the board and be redesignated as a non-executive director.
Wong Ying Wai becomes executive vice-chairman and Chum Kwan Lock CEO. Sun Min Qi will move to the role of executive vice-president and chief financial officer, Dylan Williams executive vice-president, general counsel and company secretary.
Original article: https://igamingbusiness.com/finance/full-year-results/sands-macao-growth-2023-revenue-10bn/
