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Las Vegas Sands exec boasts strong second quarter

Updated July 24, 2019 - 7:17 pm

Las Vegas Sands Corp. reported a profitable second quarter Wednesday, with Chief Operating Officer Rob Goldstein calling it “the best” second quarter in company history — “and if not, close to it.”

Sands operates The Venetian and Palazzo on the Strip, where Goldstein said room rates were strong, while occupancy and business “was very good” and baccarat grew.

“Our future in Las Vegas has become less and less dependent on the super high end,” he said in a conference call with analysts. “You can make a lot of money here if you focus on the hospitality piece and you have the right gaming mix and you’re running your floor properly and watch your costs.” he added later.

Las Vegas revenue climbed 15.9 percent to $466 million for the quarter with the biggest difference being a 50.3 percent increase in table game drop to $514 million and a win percentage of 17.1 percent compared with 7.7 percent in the second quarter of 2018. The occupancy rate dropped 0.1 points to 97.2 percent, but the average daily room rate climbed $10 to $251.

Goldstein said the company will continue to invest “with both hands” in Macau, where the company dominates the market.

“While others are talking about what they’re going to build down the road, we are building,” Goldstein said. “We’re building 1,200 exceptional suites at the Londoner and the Four Seasons. These are large — very large — stunning suites of the highest quality that will open throughout 2019, some will actually open this fall, through 2020. These suites are laser-focused on the premium mass customer at the highest level.”

The company put $1.35 billion into the renovation, expansion and rebranding of its Sands Cotai Central complex of hotels on the Cotai Strip into The Londoner, a themed resort dotted with landmarks reminiscent of the city of London. Work is being phased to avoid disruptions during peak visitation periods.

As part of the expansion, the company is spending $450 million on its new Four Seasons-branded tower with 290 luxury suites ranging in size from 2,000 to 4,700 square feet, due for completion in the first quarter of 2020. It’s also putting $400 million into 370 suites ranging from 1,400 to 3,100 square feet for the Londoner Tower Suites Macao, due to open in late 2020.

Goldstein said the company’s experience with the Parisian, which opened in August 2016, gives executives confidence that the investment will produce dividends in the world’s largest gaming market.

“We’ve seen this at The Venetian (in Macau). We’ve seen it at the Parisian,” Goldstein said. “It’ll happen again at the Four Seasons. Think about a brand-new Four Seasons building with gaming capacity with 290 exceptional suites and then on top of that we open the Londoner. Our portfolio is going to be a very different place inside the next 18 months.

For the quarter that ended June 30, the company reported net income of $1.108 billion, or $1.24 a share, on revenue of $3.334 billion. A year ago, the company reported net income of $676 million, 70 cents a share, on revenue of $3.303 billion. Earnings fell short of analysts’ expectations by 9 cents a share.

The company received a $556 million gain during the quarter with the sale of Sands Bethlehem in Pennsylvania. The company announced the $1.3 billion sale of the property to Wind Creek Hospitality, an affiliate of Alabama’s Poarch Band of Creek Indians, in March 2018. The deal didn’t close until May.

Sands again posted a 77 cents per-share dividend to investors payable Sept. 26 to shareholders of record on Sept. 18. The company also completed a $180 million share repurchase during the quarter.

It was the third straight earnings call in which Chairman and CEO Sheldon Adelson did not participate. Goldstein said Adelson, battling non-Hodgkin lymphoma, was in Israel and doing fine and is expected to participate in the third-quarter earnings call in the fall.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

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