Las Vegas Sands Reports 67% Drop in 4Q Revenue -- Update
January 27 2021 - 7:54PM
Dow Jones News
By Kimberly Chin
Las Vegas Sands Corp.'s recently ascended leaders said Wednesday
that the global casino operator's future will hew closely to the
vision of company founder Sheldon Adelson, who died earlier this
month.
The company will continue to invest in its Singapore and Macau
casinos, which generate most of the company's revenue, and consider
expansion opportunities in the U.S. in New York and Texas, company
officials said on a call with Wall Street analysts Wednesday.
"The DNA of the company that Sheldon founded will be ever
present," said Sands Chief Executive Rob Goldstein, who was named
Mr. Adelson's successor this week.
Sands reported a 67% decline in revenue for the quarter that
ended Dec. 31, the first such report since Mr. Adelson's death. The
casino magnate died Jan. 11 from complications of treatment for
non-Hodgkin lymphoma at the age of 87. The company began when Mr.
Adelson and partners bought the old Sands Hotel casino on the Las
Vegas Strip in 1989.
The Covid-19 pandemic has roiled the casino industry with
temporary shutdowns, reduced travel and limited occupancies under
social-distancing. Hopes for a recovery this year depend on how
many tourists and business travelers will return as vaccines are
distributed.
On Wednesday, company leaders didn't provide much detail about a
possible sale of its Las Vegas assets, which now include the
Venetian and Palazzo casinos and the Sands Expo and Convention
Center. But they insisted their outlook for the Las Vegas market is
positive. The company confirmed it was considering a sale in
October.
Las Vegas is struggling right now, but once the pandemic has
subsided, the city as a destination has "plenty of gas in the
tank," Mr. Goldstein said.
Mr. Adelson pushed Sands to develop convention space alongside
casinos to attract business travelers and meetings, a trend that
made Las Vegas a convention-dependent town. The pandemic forced
widespread cancellations of large events, and the convention
industry has yet to rebound under social-distancing
limitations.
But demand for conventions starting in 2022 through 2027 is
strong, Mr. Goldstein said Wednesday.
Meanwhile, the company is looking at other expansion
opportunities, including a long-held wish to open a casino in New
York and a more recent push to open the Texas market to commercial
casinos. Mr. Goldstein said he visited Texas last week. "You can't
deny the power of Texas, the size and scale," he said.
In the gambling hub of Macau, Sands' biggest source of revenue,
government-issued casino licenses expire in June 2022, and
operators are awaiting more information from the Macau government
on a renewal process. Mr. Goldstein dismissed the idea in the
industry that casino operators should sell stakes to Chinese
companies to pitch for new licenses. He said the focus for the
Macau government will be on how much the company has invested in
its properties, including developing non-gambling aspects of their
resorts.
Gambling revenue was down 79% in Macau last year, according to
government data. While casinos are open, Covid-19 travel
restrictions in China have limited the flow of visitors into
Macau.
For 2020, Sands reported an operating loss of $1.69 billion
compared with operating income of $3.7 billion in 2019. Net loss
attributable to Sands was $1.69 billion for 2020, compared with net
income of $2.7 billion the previous year.
The casino operator posted revenue of $1.15 billion for the
December quarter, down from $3.51 billion a year ago. Analysts
polled by FactSet expected $1.27 billion.
While Nevada allowed casinos to reopen in the summer following
an unprecedented shutdown last March, the state's most important
industry has been reeling from restrictions to occupancy levels and
lower spending and gambling from international tourists due to
curbed travel.
On Tuesday, the company's board named Mr. Goldstein as successor
to Sands' top job and tapped Patrick Dumont, Mr. Adelson's
son-in-law, to be operating chief and president.
The Adelson family owns a majority stake in the company with
nearly 57%.
For the quarter, Sands swung to a loss of $299 million, or 39
cents a share, from a profit of $629 million, or 82 cents a share,
a year ago. On an adjusted basis, the company posted a loss of 37
cents a share. Analysts on average forecast a 32 cents-a-share
loss.
Kimberly Chin contributed to this article.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
January 27, 2021 19:39 ET (00:39 GMT)
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