As Asia drives revenue growth in Q1, Sands is considering Thailand.
One of the main drivers of the continued development in Macau in Q1 was Sands, which the company praised once again. The operator's success in Macau has persisted when the measures relating to the pandemic were removed in January.
The Marina Bay Sands venue in Singapore also saw additional expansion from Sands. In early 2023, Singapore followed Macau's lead and removed all COVID-19 limitations, enabling business as usual.
Robert Goldstein, CEO and chairman, stated that Sands is now targeting additional growth in Thailand after achieving success in two of Asia's leading marketplaces. With the approval of a bill in the House of Representatives last month, the nation is now one step closer to legalising casino gaming.
The approval of the country's cabinet is the final step before new legislation can be implemented. In anticipation of this, Goldstein has gushed about the "exciting" market in Thailand and the possibility of Sands' entrance there.
During a conference call with investors, Goldstein stated, "We absolutely have interest in Thailand." On many fronts, it's an intriguing market. The sheer number of people, the ease of travel, and the desire to visit Thailand are all factors. Among Asian resort cities, it stands out as the clear frontrunner.
The timing might be even better than Japan. It seems plausible to me. Although there is still a lot of work to be done with the numbers and interpreting it, it is early days.
Disappointment with New York for Sands
There may be a lot of buzz about a launch in Thailand, but things are completely different in New York. There are three additional downstate licenses up for grabs, and Sands has already hinted at a possible start in the US state.
But the New York State Gaming Commission issued a warning last month that licenses won't be awarded until late 2025 at the latest. According to it, this is because of the time-consuming approvals process that is involved.
Patrick Dumont, president and chief operating officer of Sands, acknowledged that this was disheartening news. He continued by saying that Sands is still optimistic about a possible launch, but he also criticised the lack of clarification from New York regulators.
We've been working there for a long time and assumed it was going to happen in 2024. We're quite frustrated by New York," Dumont added. I don't think we have any real clarity at this point; they are now stating 2025 or 2026. Honestly, it's perplexing and disheartening because we've invested so much time and effort into New York.
It would be great if they could sort it out and inform us. Simply put, we are unsure. That being said, we will hold out hope that things improve in that area.
Analysing the revenue from Q1
Getting back to the first quarter, the numbers reveal that Macau saw a noticeable increase. The region's operations brought in $1.81 billion, up 41.6% from the previous year.
With a revenue increase of 28.2% to $771m, Sands' Venetian Macau was the region's most successful site. The Londoner, the Parisian, the Plaza, and the Four Seasons Macau all saw increases in business.
In Singapore, the Marina Bay Sands had a 36.6% year-on-year increase in revenue to $1.16 billion. Furthermore, Sands pointed out that the ultimate revenue total was reduced by $73 million due to intersegment eliminations. The result was $2.96 billion in net gaming revenue for the operator.
The gaming industry contributed over $2.29 billion, an increase of 44.6%, to total revenue. All other operator sectors also had increases in revenue, with rooms reaching $330 million, food and beverage $150 million, mall $174 million, and conference, retail, and other $77 million.
Spending increases at Sands are compensated by revenue growth
Expenses, moving on to Q1, were $2.24bn, a 28.7 percent increase. The majority of Sands' budget—$1.76 billion—went towards resort operations.
Sands had a pre-tax profit of $600 million after accounting for an extra $117 million in net financing costs. In comparison to the previous year, this was 297.7 percent greater.
Including a $89 million loss from non-controlling interests, Sands paid $17 million in taxes. So, it concluded the first quarter with a net profit of $494 million, up 236.1% from $147 million in 2023.
Aside from that, at $1.21bn, adjusted property EBITDA was up 52.4% year-on-year for Q1.
According to CEO Goldstein, the company's strategies to return surplus capital to stockholders, pursue development possibilities in new markets, and support ongoing investment and capital expenditure projects in Macao and Singapore are all made possible by its financial strength and industry-leading cash flow.
