Mr Adelson said in Wednesday’s filing that the newly-announced capital allocation – to be spent on the Four Seasons Tower Suites Macao, St. Regis Tower Suites Macao and The Londoner Macao – would provide “an ideal platform for growth in Macau in the years ahead”. An investor presentation released at the same time as the third-quarter results, gave a breakdown of how the US$2.2 billion would be spent. A total US$1.35 billion would be for the Londoner Macao conversion – the work to start in “2019” rather than the “late 2018” previously mentioned by the group – with “phased completion throughout 2020 and 2021”. An aggregate of US$400 million would be spent on the St Regis Tower Suites Macao, with approximately 370 new luxury suites ranging in size from 1,400 square feet (130 sq metres) to 3,100 square feet, to come online.
At the Four Seasons Tower Suites Macao, there would be an expansion of the suite inventory “with approximately 290 new luxury suites, ranging in size from 2,000 sq feet to 4,700 sq feet”. With both of the latter projects, the firm said “work is progressing,” with “anticipated completion in first quarter 2020”. Robert Goldstein, president and chief operating officer of Las Vegas Sands, gave some background on why the firm was investing more in Macau than previously announced, during a conference call with investment analysts following the firm’s third quarter results announcement.
He stated: “… we see growth in Macau in all segments. We see our hotel rooms are knocking out numbers we never anticipated. We think there’s a demand in that market for all kinds of different things including quality hotel rooms.” He added: “The Four Seasons will benefit dramatically by having a 300-suite facility that plays right to the PMS [premium mass segment] and to junkets. We’re going to give that property that additional space. We’ve upgraded our game there.” The “capital expenditure increase for expansion signals a bullish view on Macau prospects,” said a Thursday note from brokerage Sanford C. Bernstein Ltd.
Group wide in 3Q In the third quarter results, on a group-wide basis, Las Vegas Sands said consolidated net revenue increased 6.7 percent to US$3.37 billion, while group net income increased 2.2 percent to US$699 million. On a generally-accepted accounting principles (GAAP) basis, earnings per diluted share increased 1.4 percent to US$0.73. Adjusted earnings per diluted share were US$0.77. Consolidated adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) grew 6.0 percent to US$1.28 billion.
In Macao, adjusted property EBITDA expanded 15.8 percent to US$754 million. At Marina Bay Sands in Singapore, adjusted property EBITDA was US$419 million. Within the group’s Las Vegas operating properties, adjusted property EBITDA was US$76 million. The group’s depreciation and amortisation expense for the three months to September 30 was US$284 million in the third quarter of 2018, compared to US$265 million in the third quarter of 2017.
Interest expense, net of amounts capitalised, was US$126 million for the third quarter of 2018, compared to US$83 million in the prior-year quarter. The group’s weighted average borrowing cost in the third quarter of 2018 was approximately 4.2 percent, compared to 3.2 percent during the third quarter of 2017. Las Vegas Sands said it incurred a loss on early retirement of debt of US$52 million during the latest reporting period. “This loss and the increases in interest expense and net weighted average borrowing cost relate to the issuance of unsecured notes by Sands China Ltd,” said the results filing. The latter firm is Las Vegas Sands’ Macau subsidiary.
