Sands' Q2 revenue tops forecasts by more than doubling to $2.5B, driven by Macau recovery

Las Vegas Sands’ revenue more than doubled to $2.5 billion in the second quarter of 2023, driven by the steady recovery of visitation in Macau, surpassing Wall Street estimates. Executives of the company, which has five casino resorts in Macau and one in Singapore, said on Wednesday that Sands’ scale in these two countries bodes well for the future, particularly since the markets have yet to fully recover from the Covid-19 pandemic.

“In Macau, we were pleased to see the ongoing recovery now underway in all gaming and non-gaming segments progress during the quarter,” Sands Chairman and CEO Rob Goldstein said during a call with investors, as reported by Las Vegas Review-Journal. “We remain deeply enthusiastic about the opportunity to continue our investments to enhance Macau’s tourism appeal to travelers from throughout the region, including to foreign visitors to Macau.”

The hike in revenue and income will enable the operator to reinvest profits into non-gaming amenities in Macau, a condition required in the new licensing agreement signed with the city’s government last year, as the gambling hub seeks to diversify its economy. Operators are now seeking to increase margins by also leaning on non-gaming activities like entertainment, retail, and food to increase revenue.

The positive results also enabled the firm to reinstate its dividend for the quarter, with shareholders of record on August 8 set to receive 20 cents a share on August 16. The payout had been suspended for more than three years, as the company sought to conserve capital during the early stages of the coronavirus pandemic.

Macau's Venetian

In Q2 this year, the operator managed to both capitalize on gaming and non-gaming revenue streams. During the period, Sand collected $1.5 billion in gross gaming revenue, including $1.2 billion from mass market table games, $181.7 million from VIP tables, and $151.3 million from slot machines. It also reached $192 million from hotel rooms and $196 million from retail, entertainment and food and beverage.

In contrast, in the same period a year ago, Sands posted $267.6 million in gross gaming revenue, including $184.7 million from mass market table games, $57.5 million from VIP tables and $25.4 million from slot machines. A further $41 million was posted from hotel rooms, and $117 million from retail, entertainment and food and beverage. All figures were lower a year ago.

The operator's revenue of $2.5 billion in Q2 2023, which far eclipsed the $1.05 billion a year earlier, surpassed analysts' average estimate of $2.39 billion. However, shares of the casino company still fell about 2.8% in trading after the bell.

Macau yet to fully recover, Singapore showing growth

Visitation to Macau from nearby Guangdong province in Q2 was at 80% of where it was in pre-pandemic 2019, which leads Sands officials to believe there is still room for growth. When excluding that province, visitation from the rest of China was just over 2 million, 51% of pre-pandemic, meaning the market hasn’t fully recovered. Visitation from Hong Kong did manage to exceed 2019 figures, amounting to 1.9 million visitors for the three-month period.

Sands' Robert Goldstein

Sands could be positioned for a further rebound, as analysts expect that this month will be the best for gross gaming revenue (GGR) in Macau since before the start of the pandemic, potentially paving the way for GGR to return to 2019 levels later this year. Sands is “the best way to play Macau and one of the final consumer recovery stories coming out of Covid,” Morgan Stanley said, calling it a top pick among casino and gaming companies.

As for its other operations, while renovation disruptions in Singapore are affecting the company’s margins at its location in the country, Goldstein was still enthusiastic about growth opportunities there, where Sands is one of two licensees in the market. The company’s Marina Bay Sands resort delivered strong levels of performance in all segments, with mass gaming revenue reaching another record result.

In regards to the company’s bid in downstate New York, where Sands is competing for one of three commercial casino licenses to be issued, officials offered no commentary on the status of the project. Sands has proposed developing a $5 billion casino resort at Nassau Veterans Memorial Coliseum site in Uniondale, Long Island.