LVS’ Q2 2022 Revealed Wider Loss, Missed Expectations

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Global developer and operator of convention-based integrated casino resorts Las Vegas Sands (LVS) Corp. reported Wednesday its second quarter financial results and revealed that the business continued to struggle amid restrictions and reduced visitation.

Loss Wider than Market Expected

For the three months ended June 30, 2022, LVS posted net revenue of $1.05 billion, up 11% from the $943 million the business generated in the first quarter of 2022, suggesting that the business is on a path to recovery.

Compared to the reading in the second quarter of 2021 of $1.17 billion, net revenue registered a decrease of 10%. LVS outlined the pandemic-related restrictions and reduced visitation as the main factors behind the decline in performance.

“While pandemic-related restrictions continued to impact our financial results this quarter, we were pleased to see the recovery in Singapore accelerate during the quarter, with Marina Bay Sands delivering $319 million in adjusted property EBITDA,” commented LVS Chairman and CEO Robert Goldstein.

Operating loss in the reported quarter was $147 million, down 51% from $302 million in Q1 2022 but up 5.8% compared to the result in the respective quarter of 2021. Consequently, net loss from continuing operations in Q2 2022 was $414 million, down 13% from $478 million in the first quarter of 2022 and up 48% when compared to the second quarter of 2021.

“We remain confident in the recovery of travel and tourism spending across our markets.  Demand for our offerings from customers who have been able to visit remains robust, but pandemic-related travel restrictions in both Macao and Singapore continue to limit visitation and hinder our current financial performance,” Goldstein continued, unfazed by the poor performance across all key metrics.

Consolidated adjusted property EBITDA for the three-month period was $209 million, almost double the $110 million in the first quarter but down 14% year-over-year.

The company’s loss diluted per share of capital was S0.34 while the market expected a loss of $0.26 per share. Analysts also expected revenues of $957.21 million.

Positioned for Future Growth

Sands China registered total net revenues of $368 million on a GAAP basis, down 33% from $547 million in the prior quarter. Compared to the second quarter of 2021, net revenues were down 57%.

Net loss for the operator of LVS’ properties in Macau was $422 million, an increase of 26% from the $336 million Sands China reported in the first quarter and 154% higher than the second quarter of 2021.

To address liquidity issues, Sands China’s parent recently provided its Chinese arm with a $1 billion subordinate unsecured loan.

“Our industry-leading investments in our team members, our communities, and our Integrated Resort property portfolio position us exceedingly well to deliver future growth as travel restrictions subside and the recovery comes to fruition.  We are fortunate that our financial strength supports our investment and capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets,” Goldstein concluded.

As of June 30, 2022, LVS has unrestricted cash balances of $6.45 billion and access to $2.96 billion in borrowing facilities, while its total debt outstanding was $15.35 billion.

Author: Ian Douglas