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Las Vegas Sands Reports First Quarter 2015 Results

May 1st, 2015

Las Vegas Sands Reports First Quarter 2015 Results
Las Vegas Sands Reports First Quarter 2015 Results LAS VEGAS, April 22, 2015 /PRNewswire/ — Las Vegas Sands Corp. (NYSE: LVS) today reported financial results for the quarter ended March 31, 2015.First Quarter OverviewMr. Sheldon G. Adelson, chairman and chief executive officer, said, “While the operating environment in Macao, particularly in the high-end gaming segments, remained challenging during the quarter, our focus on the higher margin mass and non-gaming segments and the geographic diversification of our cash flows allowed us to deliver in excess of one billion U.S. dollars of Adjusted Property EBITDA during the quarter.  Despite the current headwinds in the Macao market, we remain steadfast in our focus on the consistent execution of our global growth strategy, which leverages the power of our unique convention-based Integrated Resort business model. ”Our convention-based Integrated Resort business model appeals to the broadest set of customers, generates the most diversified set of cash flows, delivers the industry’s highest revenue and profit from non-gaming segments and brings the greatest economic and diversification benefits in the industry to the regions in which we operate.  We remain confident that the continued execution of our strategy will further extend our position as the global leader in Integrated Resort development and operation and enable us to deliver strong growth in the future. ”The prudent management of our cash flow, including the ability to increase the return of capital to shareholders while maintaining a strong balance sheet and ample liquidity to invest in future growth opportunities, remains a cornerstone of our strategy.”The company paid a recurring quarterly dividend of $0.65 per common share during the quarter, an increase of 30.0% compared to the first quarter of 2014. The company also announced that its next recurring quarterly dividend of $0.65 per common share will be paid on June 30, 2015, to Las Vegas Sands shareholders of record on June 22, 2015.  That dividend represents an increase of 30.0% compared to the dividend paid in the second quarter of 2014. Additionally, since the inception of the company’s share repurchase program in June 2013, the company has returned $2.23 billion to shareholders through the repurchase of nearly 31.0 million shares.  Mr. Adelson added, “The Macao market saw strong visitation from mainland China during the quarter and we enjoyed solid visitation to our Cotai Strip properties.  We welcomed over 16 million visits to our Macao property portfolio, delivered strong growth in the high-margin retail mall business and steady performance in most of the other non-gaming segments of our business.  Notwithstanding a challenging environment in the VIP and premium mass gaming segments, we delivered $527.7 million in adjusted property EBITDA across our Macao property portfolio.  We remain confident that our market-leading Cotai Strip properties, which will be complemented in the future by The Parisian Macao and the St. Regis tower at Sands Cotai Central, will continue to provide the economic benefits of diversification to Macao, meaningfully enhance the appeal of Macao to business and leisure travelers and provide an outstanding and diversified platform for growth in the years ahead.”In Singapore, adjusted property EBITDA decreased to $415.3 million in the first quarter of 2015, reflecting modest growth in mass gaming and retail mall revenues, offset by a decrease in Rolling Chip win during the current quarter. Adjusted Property EBITDA was up 0.2% on a constant-currency basis.  Mass win-per-day reached $4.70 million, an increase of 1.1% in the quarter compared to the year ago quarter. The mass win per day figure was an all-time quarterly record when measured in local currency terms.   Company-Wide Operating ResultsNet revenue for the first quarter of 2015 decreased 24.9% to $3.01 billion, compared to $4.01 billion in the first quarter of 2014. Consolidated adjusted property EBITDA of $1.05 billion decreased 29.0% in the first quarter of 2015, compared to the year-ago quarter.  On a hold-normalized basis, adjusted property EBITDA decreased 25.2% to $1.02 billion in the first quarter of 2015. On a GAAP (Generally Accepted Accounting Principles) basis, operating income in the first quarter of 2015 decreased 37.8% to $711.1 million, compared to $1.14 billion in the first quarter of 2014.  The decrease in operating income was principally due to softer results across our Macao property portfolio. On a GAAP basis, net income attributable to Las Vegas Sands in the first quarter of 2015 decreased 34.0% to $511.9 million, compared to $776.2 million in the first quarter of 2014, while diluted earnings per share in the first quarter of 2015 decreased 32.6% to $0.64, compared to $0.95 in the prior-year quarter. The decrease in net income attributable to Las Vegas Sands reflected the decline in operating income described above, offset by a $121.4 million decrease in net income attributable to noncontrolling interests. Adjusted net income (see Note 1) decreased to $531.1 million, or $0.66 per diluted share, compared to $793.9 million, or $0.97 per diluted share, in the first quarter of 2014.    Sands China Ltd. Consolidated Financial ResultsOn a GAAP basis, total net revenues for Sands China Ltd. decreased 34.9% to $1.77 billion in the first quarter of 2015, compared to $2.72 billion in the first quarter of 2014. Adjusted property EBITDA for Sands China Ltd. decreased 43.4% to $531.0 million in the first quarter of 2015, compared to $938.1 million in the first quarter of 2014. Net income for Sands China Ltd. decreased 54.2% to $344.7 million in the first quarter of 2015, compared to $751.9 million in the first quarter of 2014.The Venetian Macao First Quarter Operating ResultsDespite the softer gaming market in Macao, The Venetian Macao continued to enjoy Macao market-leading visitation and financial performance. The property generated adjusted property EBITDA of $269.9 million with an EBITDA margin of 34.3%.  Non-Rolling Chip drop decreased 22.5% to $1.87 billion for the quarter with a Non-Rolling Chip win percentage of 25.0%.  Rolling Chip volume during the quarter decreased 44.4% to $8.52 billion.  Rolling Chip win percentage was 2.83% in the quarter, below the 3.49% experienced in the prior-year quarter. Slot handle decreased 26.8% compared to the first quarter of 2014 to $1.06 billion.  Mall revenues increased 15.9% during the quarter to reach $44.4 million.The following table summarizes the key operating results for The Venetian Macao for the first quarter of  2015 compared to the first quarter of 2014:Sands Cotai Central First Quarter Operating ResultsNet revenues and adjusted property EBITDA for the first quarter of 2015 at Sands Cotai Central were $571.8 million and $155.9 million, respectively, resulting in an EBITDA margin of 27.3%.Non-Rolling Chip drop decreased 8.6% to $1.65 billion with a Non-Rolling Chip win percentage of 20.8%.  Rolling Chip volume was $6.08 billion for the quarter with a Rolling Chip win percentage of 2.76%.  Slot handle decreased 9.8% to $1.64 billion for the quarter.Mall revenues increased 53.4% during the quarter to reach $13.5 million.  Hotel occupancy was 81.5% with ADR of $173. The following table summarizes our key operating results for Sands Cotai Central for the first quarter of 2015 compared to the first quarter of 2014:Four Seasons Hotel Macao and Plaza Casino First Quarter Operating ResultsThe Four Seasons Hotel Macao and Plaza Casino generated adjusted property EBITDA of $44.5 million in the first quarter of 2015, a decrease of 60.6% compared to the year-ago quarter.  Non-Rolling Chip drop decreased 34.9% in the first quarter of 2015 to $229.0 million, while Non-Rolling Chip win percentage was 23.1%.  Rolling Chip volume decreased 56.9% to $3.96 billion for the quarter. Rolling Chip win percentage was 2.81% in the quarter, below the 3.62% experienced in the prior-year quarter. Slot handle decreased to $133.9 million during the quarter. The following table summarizes our key operating results for the Four Seasons Hotel Macao and Plaza Casino for the first quarter of 2015 compared to the first quarter of 2014:Sands Macao First Quarter Operating ResultsSands Macao’s adjusted property EBITDA decreased 37.2% to $57.4 million compared to the same quarter last year. Non-Rolling Chip drop decreased 27.7% to $789.9 million during the quarter, while slot handle decreased 12.0% to $707.1 million. Rolling Chip volume decreased 53.0% to $2.53 billion for the quarter. The property realized 2.86% win on Rolling Chip volume during the quarter, above the 2.59% generated in the year-ago quarter. The following table summarizes our key operating results for Sands Macao for the first quarter of 2015 compared to the first quarter of 2014:Marina Bay Sands First Quarter Operating ResultsMarina Bay Sands in Singapore generated adjusted property EBITDA of $415.3 million, a decrease of 4.6% compared to the first quarter of 2014.  On a constant-currency basis, EBITDA increased 0.2%.   Rolling Chip win percentage of 3.41% in the first quarter of 2015 was above the expected range and in-line with the 3.41% achieved in the first quarter of 2014.Non-Rolling Chip drop was $1.11 billion during the quarter. Slot handle increased 1.1% to $3.08 billion for the quarter compared to the year-ago quarter. Total mass win per day during the quarter increased 1.1% to $4.70 million, compared to $4.65 million in the first quarter of 2014. Rolling Chip volume decreased 22.0% to $10.09 billion for the quarter.ADR decreased to $414 during the quarter and occupancy decreased to 94.8%, driving a RevPAR decrease of 7.5% compared to the same quarter last year. Retail mall revenue increased 3.4% to $39.8 million during the first quarter of 2015, compared to $38.5 million in the prior-year quarter.The following table summarizes our key operating results for Marina Bay Sands for the first quarter of 2015 compared to the first quarter of 2014:Las Vegas Operations First Quarter Operating ResultsAdjusted property EBITDA at The Venetian Las Vegas and The Palazzo, including the Sands Expo and Convention Center, was $74.1 million for the quarter, a 7.0% decrease compared to the first quarter of 2014.  Hotel ADR increased 1.2% to reach $244 in the quarter while occupancy declined to 86.2%, compared to the first quarter of 2014.  RevPAR decreased 1.9% to $210 in the quarter.  Table games drop, which reflected a solid quarter for non-Baccarat play, increased 2.8% in the quarter to $533.1 million, while slot handle increased 22.3% to $578.5 million.The following table summarizes our key operating results for our Las Vegas operations for the first quarter of 2015 compared to the first quarter of 2014:Sands Bethlehem First Quarter Operating ResultsNet revenues for Sands Bethlehem in Pennsylvania increased 9.0% to $127.7 million and adjusted property EBITDA increased 12.8% to $29.9 million for the quarter. Table games drop increased 6.4% to $263.4 million for the quarter, while table games win percentage was 17.3%, which was higher than the 16.1% realized in the first quarter of 2014. Slot handle increased 6.0% year-over-year to $1.01 billion for the quarter with slot hold percentage of 7.1%.The following table summarizes our key operating results for Sands Bethlehem for the first quarter of 2015 compared to the first quarter of 2014:Asian Retail Mall OperationsGross revenue from tenants in the company’s retail malls on Macao’s Cotai Strip (The Venetian Macao, Four Seasons Macao and Sands Cotai Central) and Marina Bay Sands in Singapore reached $127.2 million for the first quarter of 2015, an increase of 17.3% compared to the first quarter of 2014.  Operating profit derived from these retail mall assets increased 22.8% for the quarter compared to the quarter one year ago, reaching $112.4 million.Other Factors Affecting EarningsOther Asia adjusted property EBITDA, which is principally comprised of our CotaiJet ferry operation, reflected adjusted property EBITDA of $3.5 million during the quarter, compared to a loss of $1.4 million in the first quarter of 2014.Pre-opening expense was $9.6 million in the first quarter of 2015, compared to $4.3 million in the first quarter of 2014.Depreciation and amortization expense was $253.9 million in the first quarter of 2015, compared to $261.0 million in the first quarter of 2014.Interest expense, net of amounts capitalized, was $66.3 million for the first quarter of 2015, compared to $71.1 million in the prior-year quarter. Capitalized interest was $4.2 million during the first quarter of 2015, compared to $1.7 million during the first quarter of 2014.  Our weighted average borrowing cost in the first quarter of 2015 was approximately 2.7%.Corporate expense was $45.2 million in the first quarter of 2015, compared to $50.7 million in the first quarter of 2014.Other income, which was principally composed of foreign currency gains, was $15.5 million in the first quarter of 2015, compared to $4.7 million of expense in the first quarter of 2014.The company’s effective income tax rate for the first quarter of 2015 was 8.3%. The tax rate is primarily driven by a provision for the earnings from Marina Bay Sands at the 17% Singapore income tax rate.The net income attributable to noncontrolling interests during the first quarter of 2015 of $99.1 million was principally related to Sands China Ltd. Balance Sheet ItemsUnrestricted cash balances as of March 31, 2015 were $2.41 billion.As of March 31, 2015, total debt outstanding, including the current portion, was $9.24 billion.Capital ExpendituresCapital expenditures during the first quarter totaled $367.3 million, including construction, development and maintenance activities of $326.5 million in Macao, $23.4 million at Marina Bay Sands, $14.3 million in Las Vegas, and $3.1 million at Sands Bethlehem.Conference Call InformationThe company will host a conference call to discuss the company’s results on Wednesday, April 22, 2015 at 1:30 p.m. Pacific Time. Interested parties may listen to the conference call through a webcast available on the company’s website at www.lasvegassands.com.Forward-Looking StatementsThis press release contains forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the company’s control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to, general economic conditions, competition, new ventures, substantial leverage and debt service, government regulation, tax law changes, legalization of gaming, interest rates, future terrorist acts, influenza, insurance, gaming promoters, risks relating to our gaming licenses, certificate and subconcession, infrastructure in Macao and other factors detailed in the reports filed by Las Vegas Sands Corp. with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Las Vegas Sands Corp. assumes no obligation to update such information.Note 1Adjusted net income excludes pre-opening expense, development expense, gain or loss on disposal of assets and loss on modification or early retirement of debt.About Las Vegas SandsLas Vegas Sands (NYSE: LVS) is the world’s leading developer and operator of Integrated Resorts. Our collection of Integrated Resorts in Asia and the United States feature state-of-the-art convention and exhibition facilities, premium accommodations, world-class gaming and entertainment, destination retail and dining including celebrity chef restaurants, and many other amenities.Our properties include the five-diamond Venetian and Palazzo resorts and Sands Expo Center in Las Vegas, Sands Bethlehem in Eastern Pennsylvania, and the iconic Marina Bay Sands in Singapore.  Through our majority ownership in Sands China Ltd. (HK: 1928), LVS owns a portfolio of properties on the Cotai Strip in Macao, including The Venetian Macao, The Plaza and Four Seasons Hotel Macao and Sands Cotai Central, as well as the Sands Macao on the Macao Peninsula.LVS is dedicated to being a good corporate citizen, anchored by the core tenets of delivering a great working environment for nearly 50,000 employees worldwide, driving impact through our Sands Cares corporate citizenship program and leading innovation with the company’s award-winning Sands ECO360° global sustainability program.  To learn more, please visit www.sands.com.     Contacts:Non-GAAP ReconciliationsWithin the company’s first quarter 2015 press release, the company makes reference to certain non-GAAP financial measures including “adjusted net income,” “hold-normalized adjusted net income,” “adjusted earnings per diluted share,” “hold-normalized adjusted earnings per diluted share,” “adjusted property EBITDA,” and “hold-normalized adjusted property EBITDA.”  Whenever such information is presented, the company has complied with the provisions of the rules under Regulation G and Item 2.02 of Form 8-K.  The specific reasons why the company’s management believes that the presentation of each of these non-GAAP financial measures provides useful information to investors regarding Las Vegas Sands Corp.’s financial condition, results of operations and cash flows has been provided in the Form 8-K filed in connection with this press release.Adjusted property EBITDA consists of operating income (loss) before depreciation and amortization, amortization of leasehold interests in land, gain or loss on disposal of assets, pre-opening expense, development expense, royalty fees, stock-based compensation and corporate expense.  Reconciliations of GAAP operating income (loss) and GAAP net income attributable to Las Vegas Sands Corp. to adjusted property EBITDA and hold-normalized adjusted property EBITDA are included in the financial schedules accompanying this release.

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