Las Vegas Sands (NYSE: LVS) reported another big quarter this week, dominated by the company's resorts in Asia. It's not a surprise the company grew, given Macau's gambling revenue growth and the opening of The Parisian last fall. What this quarter gave us a look at is where growth is concentrated and how the company's resorts are holding up against increased competition. <\/p>\n
Luck is always a factor in the gambling industry as well. So results should be compared on an apples-to-apples basis against a year ago and what the rest of the market is doing. <\/p>\n
Image source: Las Vegas Sands. <\/p>\n
Overall, Macau revenue was up 23% to $1.82 billion, and adjusted EBITDA jumped 23% to $600 million. This showing compares with a 21.9% jump in Macau's gambling revenue, but remember that Las Vegas Sands has one more resort this year than it had a year ago -- The Parisian. <\/p>\n
Here's a look at the gambling volume trends for Las Vegas Sands' resorts in operation for over a year: <\/p>\n
$968 million (50.5%) <\/p>\n
$626 million (3.7%) <\/p>\n
$5.17 billion (24.7%) <\/p>\n
$1.67 billion (2.3%) <\/p>\n
$2.52 billion (18.2%) <\/p>\n
$1.37 billion (9.5%) <\/p>\n
$2.42 billion (28.4%) <\/p>\n
$295 million (28.3%) <\/p>\n
Data source: Las Vegas Sands Q2 2017 earnings report. <\/p>\n
Volume fell considerably in the VIP market and fell at Sands Macau and Sands Cotai Central in the mass market as well. This is a theme for the quarter -- down big in VIP and holding steady in the mass market. <\/p>\n
These results compare with a 35.3% jump in VIP play at Wynn Macau, Wynn Resorts'(NASDAQ: WYNN) Macau peninsula property, to $16.02 billion, although mass-market volume dropped 9% to $1.07 billion. And Wynn Palace generated another $11.6 billion in VIP volume and $729 million in mass-market play. <\/p>\n
The only reason Las Vegas Sands kept up with growth in the Macau gambling market is that it opened The Parisian last fall. Without that, it would have lost a lot of market share, primarily to Wynn Resorts. And with MGM Resorts (NYSE: MGM) and SJM Holdings opening properties in the next couple of years, it's likely there will be even more pressure on the company's market share. <\/p>\n
The most important resort in Las Vegas Sands' portfolio is still Marina Bay Sands. And it's still performing incredibly well. Revenue jumped 17.7% to $836 million, and adjusted EBITDA was up 37.8% to $492 million, although both were helped by incredibly good luck. <\/p>\n
VIP volume and mass-market volume were up 29.2% and down 2.7% respectively, which is a better indication of how the resort is doing. And occupancy of 94.3% with an average daily room rate of $397 shows just how in demand this property is. <\/p>\n
Las Vegas Sands generated $1.21 billion in adjusted EBITDA, which is more than enough to pay its dividend of $0.73 per share. And investors owning the stock today should look at this as a dividend stock rather than a growth stock, given that there aren't any new resort developments on the horizon. <\/p>\n
Investors should expect that gambling revenue in Macau probably won't keep up with the market as a whole as MGM and SJM open their properties. But Las Vegas Sands should still hold a profitable position in the mass market with its properties in the core of the Cotai Strip. And with Marina Bay Sands churning out well over $1 billion in cash flow every year, this is a great dividend stock to own for the long term. <\/p>\n
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Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. <\/p>\n
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Las Vegas Sands Is Losing Its Grip on Macau's Gambling Market - Madison.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Las Vegas Sands (NYSE: LVS) reported another big quarter this week, dominated by the company's resorts in Asia. It's not a surprise the company grew, given Macau's gambling revenue growth and the opening of The Parisian last fall Continue reading