Q1 2020 Earnings Call

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Las Vegas Sands first quarter 2020, <unk> earnings call.

Yes, Brian participates in listen only mode. After the speakers depressing patient verbal abuse question, maybe on first question to ask a question during the fashion you will need to press star one on your thought with sound. Please look fine, but today's conference is being recorded if you require any frigoris systems. Please.

Chris Bar Zero I would now like to how to conference over to Mr. Daniel Briggs. Thank you. Please go ahead.

Thank you very much joining me on a call today, our Sheldon Adelson, our chairman and Chief Executive Officer, Rob Goldstein, Our President and Chief operating Officer, Dumont, Our executive Vice President and Chief Financial Officer, before I turn the call over to Mr. Adelson.

Please let me remind you that today's conference call will contain forward looking statements. They want to make the safe Harbor provision of federal Securities laws. The company's actual results could differ materially from the anticipated results in those forward looking statement.

In addition, we may discuss non-GAAP measures by definition and reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release. Please note that we have posted supplementary earnings slides on our Investor Relations website, we may refer to slides during the Q and a portion of the call finally for those who would like to participate in the Q and a session. We ask that you. Please respect.

Our request to limit yourself to one question and one follow up question. So we might allow everyone with interest the opportunity to participate. Please note that this presentation being reported with that let me turn the call over to Mr. Adelson.

Thank you Dan.

Good afternoon, everyone and thank you for joining us today.

I hope all of you friends and families in good health.

During these challenging times.

Coping 19th pandemic is unlike anything I've ever seen in my business too.

Well this pandemic wins many challenges. It also presents each of us with an opportunity to make a difference and to provide assistance to all those who have been impacted.

A couple of news fortunate to have the financial strength.

To enable us to focus so if it's on the safety and security voting members and customers and I'm, making a difference to those and need it needs you bodes communities in Macau.

Turning to pool.

[noise], we don't know how long this pandemic will last but we have confidence that travel and tourism spending in each of our markets and around the world will eventually recover.

Sure we use depots tight.

People, who travel again jump again come together again doing Julia entertainment and social interaction to JJ doosan to conduct business.

Focusing on the support team members and communities today.

Position us to recover more quickly.

The back to the pandemic eventually sometimes it is also the right thing to do [laughter] TV.

Alright, the Muslim about an eventual recovery coupled with a financial strength.

Enables us to continue the execution of a previously and those capital investment programs both would go in Singapore.

We believe these investments will strengthen our leadership position.

In each of these markets and will provide a larger platform for future growth.

It's travel and tourism spending eventually recover.

Macau, we are making good progress in about 2.2 billion in U.S. dollar capital investment program for the London of Macau, when the Green switched influences.

[noise] in addition to these large projects.

Which who are willing to make it.

We are moving spools three that was the number of other investments, which we think will increase both the attractiveness the diversification of our integrated resort portfolio.

No I was not the time deposit flows on investment in Macau.

We see the opportunity emphasis both the financial strength.

And this strategic amendment to make additional investments.

Without referred to accelerated investment in Macau <unk>.

We intend to play a proud and supporting the local economy.

The short term.

And then sure and she'll willing to leading position you capture the eventual recovery in tourism spending.

I remain steadfast in my belief that Mattel has the opportunity to become one of the greatest business and leisure tourism destinations in the world.

And the mice capital of Asia.

As I've said on many occasions, we welcome the opportunity because visions of dollars in additional investment.

To be estimate goes diversification.

Evolution into wages, leading leisure business still isn't this tonight.

Turning to our investment in these changes in Marina Bay Sands, Singapore.

We remain excited.

Being part of seem to for continued growth as a leading business into isn't.

And leisure tourism destination.

We continue to make plug or something M.B.S. expansion.

Provide additional updates in the future.

We will also continue to reinvest in Marina Bay Sands to enhance the customer experience in advance of the expansion.

Finally, turning to Las Vegas, eventually recovery could take more time isn't in Asia.

Confident and Las Vegas is best days are ahead of it.

That Las Vegas will remain the greatest leisure business tourism destination in the United States.

Let me now spend a moment on capital allocation.

Maintaining a strong balance sheet makes great businesses, while we weathered the storm caused by this meant that Mike.

The balance sheet strength will enable us to invest in promising.

Due to growth opportunities and will position the kind that company to deliver industry, leading growth in new user ahead.

Well, we have just been did a dividend program, we remain confident that the recovery in travel and tourism spending.

And the strength of a business model will enable us to deliver both growth.

And the return of capital to shareholders in the future.

I show you I've not shed.

Hey dividends.

And your buybacks.

The last time.

Looking forward to save them again, hopefully very soon.

Thank you for joining us on the call today, and I will take questions.

[noise], ladies and gentlemen, as a reminder to ask a question. Please press Star then the number one on your telephone keypad again to ask a question. Please press Star then to number one on your telephone keypad. Please be reminded to limit your question into one and one follow up.

Question. Your first question comes from the line Joe Grapple with JP Morgan you May know ask your question.

I'm good afternoon, everybody and.

Well all of you are on your families are well unhealthy. So my first question.

Relates to I guess, the thing that we would call.

In Macau travel.

Them into restrictions idea airlift sorry.

The quarantine.

And position by Guangdong.

I know this is a tough question, but do you have the extensive when those things start to get relax and then maybe more importantly, then didn't timing on those four buckets, but but more on how are those things will eventually roll out.

Well it can only go just.

She's children I can only quote certainly the rumors that we food we have nothing positive nothing just finished but the rumors we've heard that it's going to start.

And sometimes the middle or into me.

[noise] Joel just elaborate a bit I think.

The shoulders point, we follow the same sources you do a perhaps hours a little better we do believe it will be some opening or may perhaps your June we're hopeful but as you know won't be a flick the switch shouldn't it's all different timing in terms of which provinces. We're hoping for first the I'd be asked is reinstated.

Oh, that's pivotal a into 14 day corn corn team re entry into China is equally important as you know I think the I've, yes, the first place and if the 14 decor into first place, we'll see some bright lights would be in Guangdong and then provinces will follow throughout the summary won't be one.

The switch it all properties open equally.

I think though does you know Guangdong as pivotal once that's open it opens the door for others to follow that we're gradual process and the one thing we are grateful for is that the majority of our income is derived from Asia, which as you know has been to these their situation feared sars or be it a swine flu or in the past the more converge.

And where the problems and so we think the recovery there's gonna be back the gambling back to visitation will come rather quickly, but it will come in gradual phases throughout the summer it will be you'll be Guangdong and then other provinces to follow or air lift maybe still use it for a while in terms of how much fighting trains, we running a week too.

Pretty comparable be back to a much better placed this summer and then a much better placed in the fall.

And we have seen evidence of pent up demand like crazy if more our customers who are asking win and we talk them pretty regularly so.

I feel pretty good about the return of Macau first far beyond what we'll see in the U.S.

Excellent Great and then just another question related to Macau and maybe just a question for.

Uh Huh, Patrick <unk> or Dan on the call. Thank you for including in the slide deck. The the monthly Opex from the CAD 110 million.

I want to that 110 million relates to the premium and Basemat.

So in other words, yeah, when that those segments come back yeah, you're looking at incremental margins much higher than say, the 35% to 36% that the mortgage and our overall so in other words, what would those margins be that 35 plus percent be but that would out those fixed charge.

She was that you're currently sustaining without much revenue growth on the chat much revenue.

Hey, Joe its Patrick Thanks for the question I think if you look back at our margin over the last couple of years as the premium mass and bass business grew those margin areas are probably appropriate for recovery under normally run rate conditions and so if you think about our expenses broken into category adopt our largest expenses really gaming.

Acts, which is variable followed by our payroll, which is not and then a whole host of other things.

Related to property operations fix property costs, a and things related to just general consumables and so some of those those things are variables, but it'd be very hard to characterize in say aptitude or particular market segment would result, when it started back in.

I'll call it higher margins because of this trough and I think the way to think about it is we've been very focused on managing towards margins over the last couple of years anyway.

And so the team there and and through our work together, we've been very focused on increasing our cash flow as we grew revenue and higher margin segments. So I don't think you should look at it at a rebound through particular segment and say that will expand margins I think what you can do is take a look at it and say our business, where you had plenty of leverage in it.

We have plenty of liquidity to manage through this very difficult time, and then when things do rebound. We will continue to be focused on margins were before and look to control. The cost that we can control and I think to look at it on a segment basis would be difficult because in reality, we have to open the properties.

And so you know we're going to have strength in every segment I'd like to believed that when things recover we're going to see that strength that we saw in 2019 and 2018 years before we had a great trajectory heading into 2020 and I'd like to believe that will continue maintained a very strong operating leverage that we had on run rate basis, when things were club.

Great. Thank you so much guy.

Thanks.

Your next question comes from the line F. Felicia Hendrix with Barclays. You May now after question.

Hi, Thank you so much great to hear you all until then definitely wanted to thank you and the company for all that all you've done to get important P. P to that healthcare workers out there so Patrick citizenship.

I'm, sorry, I, Didnt know which is good.

I just I was thanking you for all that you and the company have gone to get the important P. P to healthcare workers.

Great. Thank you.

Yeah. Thank you Tim we're still doing good we gotta playing.

We had said for more Sevenforty seven trips.

Turning to pick up more of the mass and PB.

So listen.

I'm really doing like that potentially change lives and it's something for us, particularly the few because the fuel is is nothing so we could the fly over there and come back at a very low cost.

That's that's that's great.

Patrick just to stay on the topic of the Opex in the monthly cash burn.

One of the things that we've kinda struggled with as we've tried to model in you know a gradual recovery is kind of had it had a flex that cash burn. So you know obviously, you're not going to go from one can back to your full run rate right. It's kind of ramp, but so is the right way to think about it.

Just kind of like and I know most of its why that's very about felt like they were thinking that is that to just kind of like.

So like pro rata like run rate it burst it in terms of how like you're right you're ramping up so is that the right way to think about it and more importantly, I'm wondering you know as you've kind of work through really mitigate costs as you thin almost like shutdown mode are there things that are going to kind of stick or they're gonna be cost mitigations costs.

I guess you efforts that you've made now that are going to benefit you in the feature.

So kind of a two part question there.

Appreciate the detail I think the way to think about margin recovery is that when you look is what color uncontrolled operating expenses, you know called across 19 represent a little bit more than 60% of our total expense structure and so when you think about that anything about sort of our controlling operating expenses that was kind of in the 38% contacts.

And so what do you will see is that those uncontrollable expenses, which are mostly gaming tax, which actually was about 60% of that.

That's a little more than 60, it's about 60% of that as Danny tax that's really going to drive the the way the margins look because we will start getting operating leverage. So if you think about that other 38% thats controllable some of that's variable our our payroll, although you'd say that it was something that.

It is under control you know we've taken the doctor in that we want to keep our team together.

And so that's something that we're very focused on so when you think of our two largest expenses added the gaming tax and as the payroll you can kind of walk into what that margin might look like during this call the transition period of ramp up.

So will we run you know call it 33% EBITDA margins were running before right out of the gate unless there's an immediate snapped back recovery that might be a little challenged but when you look at the expenses that we have controlled and you look at the marketing expenses in the way that we look at the other parts of the business, we've been able to control costs and very disciplined way you know.

We went you know the businesses experienced other troughs before and we've always managed expenses to ensure liquidity and to ensure the proper recovery when it comes around and so I think are there some margin opportunities short, but I think also depends on what segment comes back and when as you know that the junket segment is obviously much lower margin and less contribution.

And providing then mass and premium mass segment. So if we got huge volumes of mass business, our margins or go with tremendous right out of the gate. So I think for US a lot of it depends on what segment of the business you called the recovery on first.

So I think given that expense structure given the your view that you may have on recovery. The business you can kind of formulate a transitional margin processed for the business.

Okay. That's that's really helpful. Thank you and actually this is probably also for you as well you know obviously you guys had been giving a lot of stress testing on it on the company led you to the dividend decision I'm. Just wondering you had people we have the stress test cut into the liquidity cushion and would you be willing to take on.

On more debt and then if so where where would you see that mixing out and then what milestones that you have to reach to reinstate the dividend.

So I'll leave the last part of the question for the chairman since that's really something that falls to him, but I think the the key thing for US here is that as we've mentioned before on prior earnings calls is worry focused on looking at liquidity of the company very focused on looking at the long term objectives are the chairman our highest and best use of capital is reinvestment.

Correct and if you look at our our track record on return on invested capital and the projects that our chairman has led it's tremendous.

So our goal is to preserve that liquidity and also to continue invest in our key markets to drive that high ROI sick and so if you look at the chairman's notes and the strategy. These laid out we're can continue invest in these markets to ensure that we get the high returns going forward when the market does recover.

That being said, we look at a variety of different scenarios, we have a lot of different downside cases, a lot of current liquidity scenarios waterfront capex scenarios. So that we ensure we can analyze things to a satisfactory waste the board feels comfortable making a decision with the chairman and that's what we've done here. So if you look at page eight in the deck you can see that we've laid out the cash available liquidity you can see it.

Right now under the current conditions as we presented them. We can go more than 18 months, so and invest in completing the projects in Macau and continue along with Marina Bay Sands.

New developments and so that's very encouraging for us we feel very strong about our balance sheet position, our board feel very confident our ability to weather the storm and that being said if for some reason we felt like me to access the capital markets. We spent a lot of time working to ensure that we had access to the most deep and most liquid market in the world, which is the high grade bond market and so.

As an investment grade company the investment grade bond market opened very quickly after the impacts of course, the virus hit the capital markets and issuers do have access and we feel very comfortable that our ability we feel great about their hybrid market and at some point if the board makes the determination with management had it makes sense to raise additional liquidity will have the ability to do so we're very confident about that.

At this time, we're very comfortable with our liquidity on hand, we show on the analysis on page eight and you know we're looking forward to strong recovery. So we can benefit from the huge capex developments. So we've been undertaken during this time.

And then one last question I think the second part of that.

It was I thought you directed somebody that would probably best be answered by the chairman, which is kind of view on dividends and when the dividends may come back and what that looks like it's what that's okay shallow I'll turn the call back to you.

Thank you.

Uh huh.

We will reinstate the dividend.

After discussing it with a with a border devices.

When things get back to where we were.

It's very simple I don't think gives a long time away if the rumors or.

Oh is it is a big percentage of though.

Both the jeez, yeah, those gaming income in our EBITDA and I think that is lovely would come back first.

Then probably seeing the polar and.

And ER and Vegas.

And that older perhaps so.

And if so what what a rubber says it's true that people are dying and anxious to get back to a.

No we don't want to die.

Get back to a to Macau.

In June two enjoying themselves then.

It should come back sooner rather than later.

Listen I'm, the largest should hold and my family and I.

And we want the dividend instated reinstated for.

Oh, the you do.

So if you could see the amount of money that we're not getting.

We certainly like to have that in assumes account.

So.

I will.

Well well reinstate the dividend as soon as we get back to in some money.

Okay. Thank you very much.

You're welcome thank you.

Your next question comes from the line as Thomas Allen with Morgan Stanley. Please ask your question.

Thank you. So I think we're all trying to figure out what the business is going to look like in the future when things come back Macau reopened at the end of February.

There are a couple of weeks before the travel restrictions went into place in Guangdong and got stricter Macau can you just qualitatively talk to us about work, but this was like that and how social distancing measure is impacted your business and on a similar vein can you just talking about how Singapore was performing Oh I know you put the monthly numbers on fights.

Kevin, but just qualitatively how social does something measures were impacting Singapore during during the time period before I close thank you.

Ah Tom Aside it's Rob I think in Singapore, social distancing, what it did have an impact because were limit there and certainly in terms of size of the operation.

Well that in fact, when Singapore in the future question is how long do social distancing.

In Paris stay in place and we just don't know, but it will have an impact.

In terms of Singapore in Macau, I think we are much different position, because the scale and size or operations enable us to we have so much square footage there and so we more slots and tables that I think we can do much better business and the child in Singapore vis-a-vis social distances, but I think the be areas you talked about the time periods obviously.

Impacted not just by social distancing, but you know demand slowed because it was more difficult to get there. There's work concerns about access and it was a confusing time in both markets in terms of pieces are getting in getting out of warranty I don't think it's a adequate snapshot when rebound comes I think once in Macau, we opened the door.

There is back up in the 14 day quarantined Andy.

Yes steam is back in place I think we'll be able to do quite well and the social business will have minimal impact in Macau again, the size of scale, where operations in the numerous table slots and and square footage I think in Singapore. We were had a lot of demand our I spoke to team. This morning, and then they were laughing about the amount of people, calling to complain about back or close.

They want to come Gamble I do believe we'll see a lot of demand in Singapore I am concerned that may have been negative impact I cannot tell you, obviously, what that'll be but I do have more demand come this summer, especially come fall and Singapore could be adversely impacted by social distancing. So it remains the same.

Hi job and then just as my follow up when you announce a dividend cut in the prepared comments that said missiles that I think you wrote I see many strategic opportunities for our company precisely because of our financial strength.

I'm curious if it's hard to telling US comment I think some people are interpreting it turn imply that you'd be interested in M&A.

Is that right perception I think Patrick talks about high growth opportunities early I just wanted to clarify those comments.

I'd like to reaffirm what you're thinking.

It does mean that we're interested in M&A.

One of the reasons why we we had the biggest we did the best balance sheet in the industry I'm, Mike that kept up until this field is virus game was equal to the combined Mac they can't with all the other competitors in the U.S. combined.

So it's it's a it.

I'm not going to give up on developing into movies, George I'm going to add on to a strategic thinking.

Strategic priorities that we can acquire because most of the other companies. One don't have the Balaji did we do and they don't have the potential market than we do and.

We can go in and acquire one or more operations.

That does that.

Because the price has to be right.

And.

So no taken on the.

He.

Just to energy above the acquiring and ER and building and developing.

And if I could this quickly follow up on that any changes to your views on what markets you'd like to be in.

Not really but we've always wanted we've always we've always said that.

Who is the best place floors, because number one and this ER and this virus or shutdown or the agent jump into this for a long time for several times. So they used to it and when it opens up again, they're just going to come back and continue maybe and I are pace can make up little laws.

Right.

No that they've experienced so.

Asia Asia is it's got the the population is the most inclined.

Play to Gamble and other populations so.

It looks like if we can.

Can find something Golden age you, we'd certainly like to do that.

Thank you.

Hi, though to acquire or to build.

Your next question comes from the line after Steve at least pinsky.

They fall you May know ask your question.

Yeah, you guys. Good afternoon, Rob. So maybe you can help us think about the the biggest market a little bit at this point, but obviously with with what's going on you probably have seen up a drastic slowdown in in convention.

Traffic, but wanted to understand what you're seeing in terms of the folks. It did have convention meetings on the book are they willing to rebook at a later date or are they pulling off at this point.

Hi, Good question, though we see a different path and I guess would do in Asia again, Sheldon referenced the a lot the comfort, but the exposure Asia has had the viruses and these kinds of things as you know you find Asia, you know the temperature testing in mass or kind of the.

The way it works over there anyway. So I think that's the U.S. has never experience on our shores. This kind of thing so as it relates to the group market I'm surprised I just talked to George This morning, who runs our building here George Mark in tone is he's seeing strong demand in August.

From multiple groups and he feels they that demand is there. The question is gonna be air lift a into Las Vegas, I don't know how yeah lift to look next 90 days I don't know how you know the economic impact in terms of how Americans will spend money or think about it being here, but group business appears to be.

We are out there for August and into the fall, they're not canceling the 21, there they're rebooking into late summer and fall I think demands there I spoke as our competitors. The same thinking applies there I always I guess has a problem with Oh getting Bruce back into place. If we have the proper social distance thing.

The proper etiquette in place to protect people and I think that's going to be like it looked like Asia, which is a lot of a a lot of social business and a lot of controls to make sure. It's as safe as we can make it cleanliness and the et cetera, but apparently George thing to demand is there and I've heard that from multiple companies in town.

I thought they pushed back at 21, but they have it it's August September October and November I'm pretty strong demand.

So I think has no you coming from that business myself Sheldon.

They they can't.

A lot of the company's both private and association was relying upon new shows to expand the real businesses and to a dual what it is they usually do to show research, we government et cetera, and so they don't want to give up on that it it's not we can.

Only have leaving only evident this time and weekend, we don't have it at this time, we're not going anywhere, but again, that's not the case at all you don't have it and make up for the there's lots of time as soon as they possibly can.

Okay got you said and then Patrick you gave a lot of color around the dividend the dividend cut and maybe this is for you or Sheldon but was there over the thought I mean it it seems like your your liquidity position is very strong your balance sheet very strong well there over the thought of keeping some small dividend in place just to maybe.

If a little bit of a different investor base.

Included in your stock for the time being or was always just kind of 100% cut.

You know or keep it.

Well this is not a sheldon.

We haven't we haven't eliminated the dividend we just suspended.

And Ah, yes, we could come down to a to cut rather than a total suspension.

Oh, well see what happens how fast we opened places.

What kind of income of dunnage movies.

Listen I in Europe, we're on one Hussein boat.

As I said I own a largest a mom and stuff my family and I have anybody in.

Of anybody and I want to see that dividend Oh.

I mean.

Recover and maintain it as long as possible.

Okay, great. Thanks, guys appreciate it.

Welcome.

Your next question comes from the line of Shaun Kelley with Bank of America can you know after question.

Hi, good afternoon, and what I echo the sentiment and I hope everybody that safe and healthy I just wanted to follow up on maybe the Singapore recovery. Because this market is you know it's relatively unique to to Las Vegas Sands on you know I appreciate all the extra color and disclosure you gave there I can you maybe Rob give us.

A little bit more color on just sort of the the current customer mix there and how you expect maybe that to trend as you know Asia Kinda reopens, maybe between you know kind of at your VIP customers in a little bit of yeah. The mass market, there where's that coming from and and how do you think the source markets are gonna <unk> going to react you just in that market.

Yeah, well currently as you know there.

The customer mix of their zero or since we're close till June one or the team is pretty confident that will get open in June doesn't create much concern that the it'd be extended beyond this they seem like they can have you saw the journal. This morning. The majority the problem is in the is isolated and I think they appalling and.

And and Andrew and all the guys. You're told me is more they feel pretty calm we opened June so local market was thriving and they think will thrive in fact, a they were talking about the amount people calling to complain that they couldn't gambles, we feel pretty confident the local market will bounce back immediately and be pretty strong actually because it's a it's a you know.

Activity people enjoy being part of in Singapore, We're very confident that rebounds really quickly on June too.

The local market these foreign local market meeting, Indonesia, Malaysia, I'm not too.

Strong on because I think that those countries are facing challenges I'm not sure. The borders will even be open to those people but.

I feel less aggressive in terms of <unk> rebound of our local market, thus far meaning again, the country's nearby Indonesia, Malaysia. The struggle right now I think we'll be slow to see that that return I think we'll be quick to see return from to China. If we get open the borders open and the Chinese are able to come I think that were cover.

The quickly I think Singapore becomes positive right away in June and then ramps up throughout the summer, but it will miss some key elements of local foreign market surrounding the neighborhood I don't think Malaysia, or or Indonesia, we simple to get back to Singapore for the summer I do think China and local play will be strong I know local baby store.

Because of drove our business prior to closing and we hear anecdotally that people are really frustrated want to go back to gambling in the casinos and well also as you mentioned that you know Sean you know you've been days enough that I do you have on a mask or social distancing or thermal Chuck thermometer checks will not be are difficult for the customers.

In local.

Emporiums, nor a Chinese does tours adult accepted they'll deal with it and as you know the high end baccarat business anyways people to rooms, two or three in a large room. So no problem. There. The only thing I'm concerned about is if we get into a mass business. There again quickly is what we may lose them the spread can be difficult vis-a-vis.

Are these the main gaming floor, because we'll be social distancing slot machines et cetera, but once again like a lot of markets. We have a lot of very high in play both slot EG and table I think we are comedy we may be at a at a risk or ways to masses of people coming in and the slot machines not having enough capacity.

And payment tables mass no risk on the high end [laughter] as risk on the on the mass mass and again I think Singapore is going to be like the cow a quick to recover a unlike the U.S., which I think gives me more more drastic and slower.

Their ability to acclimate to this environment has improved in the past they've lived through Sars. They lived through swine flu. They lived for a lot of things and they were basically it come back and they come back much quicker. We anticipate so we feel bullish with a caveat that.

Our foreign business around this or neighborhood farm business might be pushed back until the fall and not be there we feel strongly our high end Chinese business recover rather quickly we know because the demand is there.

Great really appreciate all the detail on that Rob and then you sort of the other way to split out you know the trajectory of recovery in Macau here I think you talked a little bit about on you know the restrictions are there and the difficult read in March but on did you see for what we were able to two to see in March I mean was it really didn't VIP was.

The only thing or was that was the primary market. It was available at that time, just given the broader travel restrictions that kind of the way to read the the data that we have thus far is that kind of what a little bit of what you saw and that market just wouldn't characterize it for investors I wish I can give you a better color, but we just saw its such a turned down there that the business just turned out to people I read these.

Things that the high end it will come back first of the premium mass to come back at the mass mass I don't think we saw evidence that theres two weeks I think it was so confusing and and restrictions et cetera. I. Just don't he was good evidence what's gonna have for the future where I do believe is that try is going back to work, they're going back to travel and when the IB S and the 14 day quarantine or take.

Get away I think all segments come back and come back rather healthy I think by you know <unk> by late summer early fall well see some nice profitability out of our our Asia properties by late fall by Thanksgiving or October I think you'll see very strong return to a better time over there we feel.

It's extremely confident that Asia gets better quicker and you're seeing are ready in China with the travel restrictions being east what I don't know as the province by province access into Macau, how that will happen, but it will happen and I think the there's been a strong claim made by the car government to get started they're hoping to see there.

The restrictions east I, just don't think the two weeks threes it'd be really a strong indicator of house I come back I think was back across all segments I'm not a believers just going to be the high end I believe we have plenty of mass people as well.

Thanks, Rob the the optimism is definitely a refreshing so appreciate it.

Thank you we're optimistic.

The world will recover.

Your next question comes from the line of Stephen Grambling led Goldman Sachs. We don't ask your question.

Hi, good afternoon, all that kind of the well wishes to all of you and your families and also felicia's on the personal protective equipment as my wife was actually one of those healthcare workers eating it sounds thank you.

My first my first question is a follow up on the comments around M&A can you elaborate on the guidelines that may dictate whether you would pursue individual assets versus whole companies, how willing regulators may or may not be these types of transactions and where are you generally would expect the biggest synergy potential.

Shelled you want to take that he wants to take a hearing loss in the office it could do.

Okay. So it's Patrick and thanks for the question I think you know one thing that you should sort of look at in terms of the lens, we might examine M&A up through is just on the our long term views on returns and so you know the chairman and it's been very strict about the way we deploy capital in order to ensure that we get the right returns to justify.

Thanks, and that's always been true and developments and I will certainly be true through eminent any M&A transaction and so I think the way we're thinking about it is and from the discussions that we've had just around trying to be opportunistic looking to see high quality assets, where they're in key markets, where it may be cheaper to buy them to built and.

You may find something that is attractive and fits into our overall strategy. The long run and I think we're going to be very returns focused.

Really our industry is heavily regulated and we're gonna have to ensure a proper compliances, we always do and we're not to look very carefully at those opportunities in that context, and I think a you know it's not as if.

This is something that will happen immediately this is going to evolve overtime and we're going have an opportunity to take a very hard and discipline look and see if any those opportunities are attractive to the chairman of the board and so I think thats kind of how we'll think about it.

Thanks, and then maybe a follow up on Sean's question around Marina Bay Sands, you talked to know revenue trajectory. The can you just remind us what the puts and takes that might impact that properties margins relative to others. As we think about the reramp since it looks like you had very solid margins this quarter and it looks like even the opex per day.

Hey in a zero revenue is better than peers.

Yeah.

So I think overall Marina Bay Sands the margins in that property are really tremendous I think a lot of that has to do with the original strategy that goes back to the chairman's view that creating a very high quality with integrated resort multi amenities to the highest level would produce high margins and easy to result, since the history the opening in the property.

That's right. She has been spot on is is really delivered its been a tremendous asset and has driven tourism is really contributed to the market in Singapore and I think it's been great I think to Rob's comments earlier, we know that there's a lot of pent up demand and you know I think the opportunity here for US is to look at it for the long run I think we're very focused on deploying capital there we have a.

A bunch of projects to help and enhancing improve the offering Marina Bay Sands that we think we margin enhancing and cash financing I think we're very focused on the development of tower to a you know the chairman's vision. There is great and we're very excited to get that arena open we think that will add to the tourism offering of Singapore, we already have some market test about that because we have the.

You know, we obviously have the arena in Macau that we operate and it's a great tourism asset it works very well with the mass business and premium mass business. So we see a corollary there in Singapore, where we can drive significant visitation from the around and catchment area out of that arena. So I think if you look at Singapore over the next couple of years, we're going to see what we hope is very high value returns on the new deployed.

Capital in a market that continues to maintain very high margin structure and so while we don't know exactly the pace of recovery that we'll see today, we do know that in the long run and as Rob said when things recover because the demand we're going to be poised to take advantage on it and get to deliver very high margins and strong cash flow. So that's kind of how we think about it.

Thanks, so much for all the color perspective.

Okay.

Your next question comes from the line as Carlos sent a rally wed Deutsche Bank you know after question.

Oh, Hey, Thank you and thanks, everyone for the comments.

I think this one's probably best for you as as you think about kind of the that near to medium term.

And maybe make the assumption that.

Specifically in Macau I would imagine the two sub segments of your game business will ramp at different speeds.

Just strategically at all to maybe <unk>.

<unk> business, so that more towards a VIP customer that might be more pronounced or non or not that I.

Yeah No problem here are you, saying, we couldn't catch all that you're saying that you think VIP is very much quicker than mass.

Well on that if that if your opinion and then if you. If you came under business at all it differently. So I don't want meet your perspective on that so no. We're not we're not going to think that way. We believe the mass premium we believe the pent up demand is real and all segments and if anything I think it'd be a mistake to think that way. We we believe this is gonna open up to.

A lot of business come a this summer and fall or the social this is gonna have to work through but I think Asians and Chinese or as they open that market up open that country up as those quarantine barriers come down and the IB Escos comes up I do think resi returned all segments, where we're pretty confident that Macau.

So, making some money this summer and a lot of money come fall and again I'll be redundant here, but the Asian is we've never seen this kind of a virus on our shores here in the U.S., where it kind of the taking it back and shell shocked by it Asia has seen it numerous times are they understand it they dealt with it you ice Hong Kong is open operating.

And it never close in terms of retail and restaurants, it they're walking around with gloves and Maskin sanitizer in temperature checks you don't things open Hong Kong in terms of the restaurants retail and I think there their statistics are pretty excellent relative the rest of world. They can deal with it and Macau, we'll deal with it and I think visitation will be I think it'd be a mistake.

To try to handicap, which segment was back first I think they all come back and we're pretty anxious to see that happen next 60 days, we the first phase and then hopefully by late summer really kicks in all the way.

Our job is to provide a safe environment for our for our employees and for our customers. So they keep coming and there's no reinfection, but again, unlike the U.S., which I think people were concerned here in Nevada, rather the hard time getting open again because people are so scare of any idea Macau Hong Kong right now you can refer dinner and go shopping.

They've kind of come to terms that much more comfortably than we have but I think as a mistake to try to figure out which segment resurrect quickest I think they all come back pretty quickly.

Great. Thank you that's helpful. Just one follow up as it pertains Marina Bay Sands. It looks like just timing of Capex has shifted a little bit from where it was could you guys just kind of provide outline for maybe the key milestones that project and how you kind of foresee.

And process.

Oh, sorry are you, referring so page 11 has our capex.

Expectations.

In the slide presentations, you, referring to the expansion so the new tower for Marina Bay Sands, Yeah, just in terms of the timeline of construction and whatnot.

So I think what we've laid out here is pretty consistent with our thinking today I think we're really not going to start any heavy expenditures until the back half of 21.

And then we'll sort of follow as quicker and execution schedules. We can follow it's funny the chairman always says to us.

Built the Venetian in less than two years, you've actually do the same so we're going to the best that we can do.

To be as aggressive as we can be because really we want to add these assets to the tourism portfolio, Singapore as quickly as possible. So I think if you look in Macau and you look at kind of trajectory of our latest project, which was really from the ground up the Parisian you've got to see the distribution there some of our prior presentations about how capex progressed.

That is influenced by labor availability.

You know in Singapore, we'd like to believe that in this particular market will have the ability to pursue this schedule that we kind of laid out there with the majority is coming across 20 to clean up in 23, and then we'll see what happens maybe it'll be somewhat 24 as of right now we're not sure. So I think our goal is to try to get this thing open as quickly as possible I once we get the proper approvals from the governor.

Our Singapore.

Obviously with their support so.

And just to highlight how we do have a delay draw financing for that project and so that that project is financed in advance and it's the same bank group that we've been with for years that also holds the credit facility. There in Singapore. So we're continuing to make progress we're working on a timeline. There we're trying to work as quickly as we can given the current environment and will continue.

We continue to keep you updated in upcoming quarters, but we'd like to pursue the schedule as aggressively as we can.

If one is one part we also will be open when we do open up a this summer our four seasons is fully open operational 290 keys and then by the end do you have the London are done as far as the outside not the facade. So we're moving quickly a 3000 workers on site right now to finish those projects.

Great. Thank you very much.

Your next question comes from the line of Harry Curtis wed Instinet had we not ask a question.

Good afternoon, everyone.

First question had to is with respect to building margins back in in Macau.

I'm.

Going back to the old.

Adage never let a crisis still by without learning from it as you look at Youre at some of your larger expenses ex labor. So for example, marketing food and beverage.

Are there.

Are there opportunities here too to tweak the way that you operate it to bring your margins back faster.

So that you'll be running actually more efficiently even with fewer guest for example.

All right I guess my confidence, maybe misguided, but I believe business Macau is gonna be strong off we want to worry about cutting some restaurant workers are cutting some you know I just don't think there's enough margin in in cutting cost is the revenues are there I think revenue will be there I just like we're overplaying. This in terms of how Asia things values were rebound.

I think that's an appropriate commentary in question these to be Las Vegas, I think it's very fair question is good but it macallan sample or I think we have great pent up demand we hear it we feel it and we think that unless were misguided not thinking a it'd be mistake to pullback RFMD pull back on a lot of things we do there.

Because again you can't overcome the enormous topline. These are top line businesses over there in Asia, and I think they need those kind of services goods and services to be.

Successful I don't see maybe policies are but I, just don't see enough and less if business goes back levels. We believe this year in Asia, I think it'd be mistaken to try this shave a few points of cost and drive margin because the revenue should be there my estimation.

Well just one additional thing to think about before the start of this disruption beginning at first quarter. This year. This was a very well functioning very well oiled machine that ran high margins was incredibly efficient and continually look to make itself more efficient each quarter.

And so I think we won't look at this purely from the transition standpoint, we're going to look at this from the way we always look at it which is to Rob's point, we've got to grow revenue and we believe that it will happen and then we're going to continue to manage the business in a very cost efficient manner, ensuring that we generate as much cash flow and keep our margin strong and.

So I think it's difficult from where we sit today tell you all the things that will do going forward, because we've looked very carefully our business each quarter and we've taken costs out of it appropriately and so I think we'll just continue to do that and try to run as efficient business as possible.

Fair enough.

Let me move onto him.

Our topic that looks out of five to 10 years and is tied to your.

Just kelvin's comments about additional spend again in Macau.

There's a new there's a new chief executive some investors are.

Oh are questioning the relationship that the concessionaires might have I'm going forward with the with the new Chief executive but it seems to me. His most recent comments has actually been somewhat encouraging that that the concessionaires have been.

Positive for a Vegas, so Mike So my question or Vegas, Macau, rather so my question is as as you think about the future.

And spending in in Macau.

What partnerships or or or or might might develop with the government or other companies or.

In the hospitality industry or in completely different industries.

That would physician Las Vegas Sands to get a high return on incremental investment.

Well first of all say, what I'll repeat shelton's or comments at the top of the call we'd love to invest in Macau were keen to invest Macau I don't know you saw the chief executive calling us out for participating in the quarantined with our with our other hotel rooms, and and commending our actions there, but we're pleased to see recognition that but anyway.

Always been consistent and shoulder has been consistent we want to invest as much as we kind of Macau as often as it kinda Macau and we're anxious for that day to come Harry the minute. We get the go ahead I think Mr House, Our board would be predisposed to write very large jets very quickly. We've always been believers. We believe the markets just has so much potential growth.

Both there there's too much opportunity you know the the the future account was very bright and very diversified and were very actually part of that I think Sheldon placement unequivocal in his willingness to invest invest invest in the future Macau Sheldon you want to echo the sentiment.

Oh, yeah analytical those cycle.

You know.

[laughter].

Yep.

We.

Well is.

Well be the best if not one of the best it'll be the best.

And the best gaming and leisure destination.

Anywhere in the world.

So there's no reason why it a it shouldn't grow well.

I was talking I was thinking about potentially it could only those big as Vegas does.

It actually.

The population there says is much greater than what Vegas news.

And.

It could go into that but.

Well take a long time to go into that there's been 150000 rooms, there's only about a 35 40000 rooms.

In a in Macau.

We'll take quite a while food to go well beyond that.

Okay. Thanks very much.

It certainly has the growth potential.

Thanks I appreciate it.

Thank you.

And your last question comes from the line if David Katz with Jefferies. You May ask your question.

Hi, good evening, everyone and thanks for taking my question.

I wanted to just go back to the reopening and try and envision and Rob you touched on this on the mass side, you know what operationally it could look like.

You know from you know people, taking a ferry border crossings et cetera, you know.

Are we envision in gloves masks and temperature and I suppose I would ask the same question about Las Vegas, and you know given as you point out aptly you know we may not be is used to it here.

What that potentially could look like are we saw some you know released from the Nevada Gaming Commission. This afternoon right right, Dave I think it if you look at if you I think I turned to Hong Kong as a guideline I think the Asian people well adaptable, yes. The answer is to be temperature checks they'll be mass the big laws were going to every week we can.

To ensure our employees our customers an environment. They can have fun and visit us and all that but they're not going to be at risk as best we can prevent that the rooms will be a clean beyond clean out the wiping data surfaces, the social distancing, they're doing it in Hong Kong I think last time look Hong Kong had less than that doesn't deaths.

And they again retails opened right you're going to Hong Kong or the restaurants, you sit at a certain Oh 510 feet. Apart you got attempt check coming in you were gloves wear masks and it's a different world, but the Asian said that they there's all kinds of sanitizer, but they're doing it as we speak at Hong Kong today, I envision a similar.

Environment here in Las Vegas, and in Macau. The difference is going to beat the ability to acclimate is much higher in Asia because for years I've been going airports be Tokyo, or Hong Kong, Macau, and you do attempting to check and people worrying mask is not that far and that they are thinking so I don't think the Asian people have a a problem at all in fact, I think they're gonna.

Welcome it and be anxious to get back to having fun and casinos I believe that <unk> from the bottom my heart recovery in Asia is going happen rather quickly I'm not as comfortable in Vegas, one of the reason I'm concerned is because this far into our thinking this is I'm wearing a mast out for a while in its different yes. It is different and I think it won't be a little bit.

This call here I also worry about the air lift and how the airlines will be able to fly into Las Vegas, because they are left an important part of our success. So although it's going to take some time some comfort to get people acclimate I think it's going to happen and Oh, Yeah. There is a problem at all that's going to happen in Macau them into the open doors Macau we're.

Ready we have to go out as the master sanitizer the temperature checks, but I think your best example is what's happening in Hong Kong as we speak you know it's pretty amazing you can go shopping you can go eating.

A lot of things there and life there is not unusual but it's going all the ongoing and that's all the hope we can do in Las Vegas, as well and adapt to the new environment until the day comes with a vaccine or cure I believe that's going to happen I I haven't lived through so many these things from the stock market crashed eightys to 2001 so.

Eight nine to Sars people or so that's not change everything is gonna be all different nobody's, saying I don't agree I think this single gets fixed at some point there will be there'll be some remedy b to b, the vaccine or be though or some way of getting the medical people. There's too many smart people out looking but I think of the world will return, but Asia, where you turn.

Quicker and it was quite a rebound much faster than here and there will be no version talking I'm, asking gloves and social distancing affect the welcome. It is all they can come back to Macau in Singapore.

Oh.

Oh member all those pastimes.

What's that you're not that only you remember all those incidents into best.

As much younger, but I remember them [laughter].

Dinner out sounds great well, everyone and David will take it well I should say yep.

Thank you for Centurion same thank you, ladies and gentlemen for joining Las Vegas Sands first quarter two towers. The training earnings call that concludes today's conference you may now disconnect and have a great thing.

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