Q4 2024 Las Vegas Sands Corp Earnings Call
Thanks for holding. We appreciate your time and patience. Please stay on the line and we'll be back in just a moment.
Thank you for waiting. Your patience is appreciated. Please hold the line and we'll be right back with you.
Good day ladies and gentlemen and welcome to the SANS fourth quarter 2024 earnings call. At this time all participants have been placed on a listen-only mode. We will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at SANS. Sir, the floor is yours.
Daniel Briggs: Thank you very much. Joining the call today are Rob Goldstein, our Chairman and CEO, Patrick Dumont, our President and COO, Dr. Wilfrid Wong, Executive Vice Chairman of SANS China, and Grant Chung, CEO and President of SANS China and EVP of Asia Operations.
Daniel Briggs: The company's actions ultimately differ materially from the source of such and such forward statements. In addition, we will discuss non-GAAP measures.
Daniel Briggs: Reconciliation to the most comparable gap measure are included in our press release. We have posted an arranged presentation on our website. We'll refer to that presentation during the call. Finally, for the Q&A, we ask those with interest to please post one question and one follow-up. We might allow everyone with interest the opportunity to participate.
Daniel Briggs: This presentation is being recorded. I'll now turn the call over to Rob. Thanks, Dan. Thank you for joining us today. We'll begin with Macau. The Macau market continues to grow.
Daniel Briggs: Gaining revenue for the market grew 6% in Q4 of 2024 when compared to the fourth quarter of 2023. Mass gaining revenue grew 5% in the quarter compared to one year ago.
Daniel Briggs: We believe that China's economy will grow and the cow market will grow as well. Gross gaining revenue in the cow should exceed $30 billion in 2025 and continue to grow. The scale and quality of the assets we have built are second to none.
Daniel Briggs: and our active position enable us to grow faster than the cow market in every site. Our business strategy remains clear and constant.
Daniel Briggs: We are investing in high-quality assets that also have scale. We've designed our capital investment programs to ensure that we will be the market leader in the years ahead. Our approach will enable us to grow fast in the long-term, grow our share of EBITDA in the Cal market, and generate industry-leading returns for invested capital.
Daniel Briggs: While we are so confident of Juice's success in a competitive market like Macau, our assets give us a strong advantage. The scale and quality of the room and inventory, coupled with our retail, dining and entertainment, enables us to tailor our offerings to attract the most profitable customers.
Daniel Briggs: Turning to our results in the county, we have a solid even top of the quarter despite having 20% fewer rooms available in Code Tide than we will have once London is completed by the second quarter of 2025.
Daniel Briggs: We opened the Lunger Grant Casino in the last week of September and operated 315 Lunger Grant Suites during the quarter.
Daniel Briggs: We will introduce more Lundner Suites during the next two quarters. Today, as the Lunar New Year begins, we have approximately 1,000 Lundner Suites and Rooms in service. The full complement of 1,500 Suites and 905 Rooms will be in service by May of 2025.
Daniel Briggs: SGL continues to lead the market in gaming and non-gaming revenue and market share of EBITDA.
Daniel Briggs: Our objective is to capture high-value, high-margin tourism. We have unique competitive advantage in terms of scale, quality, and diversity of product offerings. Upon completion for the Londoner in May, our product advantage will be more pronounced than ever.
Daniel Briggs: Moving on to Singapore, another strong quarter, $537 million in adjusted profit EBITDA. Mass gain is thought to have reached $746 million a quarter, reflecting a 71% growth in the fourth quarter of 2018 and 28% growth in just one quarter of a year ago.
Daniel Briggs: The results of Rehabilitation Standards reflect the positive impact on our capital investment program and the growth of high-value tourism.
Daniel Briggs: by the Robust Entertainment Lifestyle and Calendar. As we complete the balance of our investment programs for the first half of 2025, there will be considerable runway for growth.
Daniel Briggs: Thanks for joining the call. I'll turn it over to Patrick before we go to Q&A. Patrick? Thanks, Rob. There's something I want to mention before we get started, the details of the quarter. The fourth quarter of tourism to the Macau market was impacted by the celebration and events.
Daniel Briggs: and December that marked the 25th anniversary of the Special Administrative Region of China.
Speaker Change: Macau EBITDA was $571 million for the quarter. If we had held as expected in our rolling program, our EBITDA would have been higher by $22 million.
Daniel Briggs: When adjusted for lower-than-expected hold in the rolling segment, our EBITDA margin from the Macau portfolio properties.
Daniel Briggs: excluding the Londoner, would have been 35.1% or down 230 basis points compared to the fourth quarter of 2023.
Daniel Briggs: Our turnover rents in Macau were $27 million lower in the fourth quarter of 2024 than the prior year fourth quarter.
Daniel Briggs: Our margins at the Londoner were directly impacted by the reduction in elbow room inventory during the quarter. We will have approximately 20% more rooms and suites on COTI by May of this year, and approximately 47% more rooms at the Londoner as we complete the Londoner grand renovation.
Speaker Change: Marge at the Venetian was 36.7% while Marge at the Plaza and Four Seasons was 37.2%.
Speaker Change: We continue to expect margin improvements as our revenues grow, as we use our scale advantages to better address the unrated play in the market, and as we focus on managing our costs, including refining our reinvestment risk to optimize cash flow.
Speaker Change: As Rob mentioned, we are nearing the completion of our Lung NeuroGran renovation program. Upon completion, our competitive position will be stronger than ever. We expect meaningful epidot growth and margin expansion in the future.
Turning to Singapore, MBS's EBITDA came in $537 million.
Speaker Change: Assuming expected hold on our rolling play, our EBITDA would have been approximately 2 million lower. The strong financial results reflect the impact of high-quality investment in market-leading products and growth in high-value tourism.
Speaker Change: Had we held as expected in our rolling play segment, MBS's EBITDA margin would have been 47.2%.
Speaker Change: We will have substantially completed our $1.75 billion refreshment program at MBS by May of this year. We are still in the initial stages of realizing the benefits of these new products. We expect growth in the future as we continue to attract high-value tourism to Singapore with our enhanced product offering.
Speaker Change: Turning to our program to return capital to shareholders, we repurchased 450 million of LVS stock during the quarter and paid our recurring quarterly dividend of 20 cents per share.
Speaker Change: Our annual dividend will increase to $1 per share or 25 cents per quarter for the 2025 calendar year.
Speaker Change: In addition, we purchased approximately $250 million of SANS China stock during the quarter and in January of 2025, bringing LBS equity and trust in SANS China to approximately 72.3%.
Speaker Change: We look forward to continuing to utilize the company's capital return program to increase returns to shareholders in the future.
Thanks for joining the call today. Now let's take questions.
Thank you. Great question.
Speaker Change: Thank you. Ladies and gentlemen, the floor is now open for questions.
Speaker Change: If you would like to enter the queue to ask a question, please press star one on your telephone keypad now
Speaker Change: If listening on speakerphone today, please pick up your handset to provide optimum sound quality.
Speaker Change: Also, we ask each participant to limit yourself to one question and one follow-up. Please hold a moment while we poll for questions.
Speaker Change: And the first question today is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.
Carlo Santarelli: Is your thinking changed at all around the way you allocate capital? Perhaps maybe being more advantageous looking forward with respect to the SEL shares?
Speaker Change: Look, I think we really believe in the SEL story. We've been big investors in growth in Macau for years, and if you look at our investment program, it's designed to grow our business and our strategic advantages there. And we've been investing to create growth for 2025 and beyond in every segment.
Speaker Change: Look, our view is that we want to execute against our massive asset base there, and I think for us, the way we show that is not only through growth, but also through acquiring more shares. We want to own more of SEL, and you'll see us be active in the market over time to do that.
Speaker Change: We really believe in FCL. We think there's real value in the future and owning the shares there, and so we're going to exercise against that thesis.
Speaker Change: Very good, thank you. And then if I could just follow up as it relates to MDS.
Speaker Change: There's clearly been, you know, a lot of change in the property, all the room remodels, all the things that you've been doing over much of 2024 and in the fourth quarter.
Speaker Change: Clearly across the math side, whether it's drop revenue on the table side, drop revenue on the slot side, you guys saw a very nice acceleration of year-over-year growth.
Speaker Change: when looked at relative to the 3Q. How much of that do you think is, I don't know, maybe exogenous or maybe, I don't want to say one time, but a result of some other things going on in the market versus how much of that is the successes of kind of the capital you put in and the fruits of that?
Speaker Change: Well, one thing I would say, Carl, it's not a one-time event. It's an ongoing event that keeps accelerating. I think you're right. It's a good observation. I look at these numbers.
Speaker Change: non-rolling win and slot win is three billion dollar lottery. That's pretty astounding.
Speaker Change: I think it's a few things that I favor. One is a very strong market, but also the great assets are coming to their fruition. So when you invest heavily in something that good a market, you get the right thing in the right place, right time, it all comes together. It's not a one-time thing, nor is it peaked. The final product will be here this summer.
Speaker Change: It's an amazing place, I think you've been there recently, and it just keeps on going. But you're right, the acceleration year on year is truly exceptional. But I think we're just at the beginning of a huge growth surge in Singapore. It's not going to end. We're in the right place, right time, with the right product.
Speaker Change: Hey, one thing I do want to say is the key thing about Singapore, and you've heard Rob and me and the rest of the team talk about this on many quarter calls, the key thing about Singapore is about the quality of tourism.
Speaker Change: It really is an unbelievable market in terms of the value of the tourists showing up there and we've been very focused on investment in the highest quality of assets to match that high quality of tourism.
Speaker Change: You know, I think for us, this quarter validates the investment thesis and the growth that's available to us in this market because of the strength of what's going on in the catchment area.
Speaker Change: And so, when you look at Singapore as a market, it's incredibly strong and desirable. There's a growing high net worth population. There's growing high value visitation. There's a lot of business activity there. And there's continued investment in strong tourism infrastructure. So, from that standpoint, it's a very unique market, and we really believe in it. We think it's the highest quality cash flow in our industry.
Thank you both very much.
Thanks, Carlo. Thanks, Carlo.
Speaker Change: Thank you. The next question will be from Robin Farley from UBS. Robin, your line is live.
Speaker Change: Hi, thanks very much for taking my question. This is Artie Knitt for Robin. I know you don't talk about the current quarter, but I was wondering if you could take a few minutes
Speaker Change: you know, to give us your overall take on the Chinese consumer.
Speaker Change: what you are seeing in terms of bookings for the upcoming holiday, and more importantly, do you feel there are macro indicators that the base consumer could return to pre-COVID levels in Macau this year? How do you see that recovery? And then I have a quick follow-up.
Speaker Change: So, I think, first off, I think we're still talking about a $30 billion...
Speaker Change: GTR market. It's the largest market in the world. It's been growing.
Speaker Change: It looks like it's going to continue to grow for the foreseeable future. We believe very strongly the strength of this market. We've been investing into it for that reason. I think it's very hard for us to point to a specific indicator of the Chinese consumer that is an indicator for our business since we represent such a small level of penetration into our core market, which is China.
Speaker Change: And so from our standpoint, we sort of look at the market. Would we do better with a stronger Chinese economy? I think that's an easy thing to say yes to. But I think overall, we're very happy with the direction of our business, our investment. And hopefully, as things progress over time, we'll be the beneficiary of a stronger Chinese economy and see our investments produce more cash flow.
Speaker Change: Grant or Wilfred, do you guys have any other comments regarding this question?
I think, I think the
GGA, and you can see throughout
last year in 2024 has been very resilient.
and I think if you look at the premium...
Speaker Change: very strong throughout the year. And you saw October, we had the best month since the pandemic for GGR. Yes, there are other parts of the consumption universe which are much weaker than what gaming has been. And you see some of that reflected in our retail business where the retail sales were down.
Speaker Change: against the prior year, whereas for the Macau market, the Qijiao was still up 6%, as Rob referenced in his opening remarks.
Thank you.
Speaker Change: One thing is that our actions speak loud, and we keep investing and buying into Macau. We believe in Macau. We believe in China. And we believe the return of the base mass as well as the continued strength of premium mass will grow. We're big believers. We wouldn't be putting billions of dollars in the ground if we didn't believe.
Speaker Change: So, yes, we do believe it's going to come back, and we don't, we can't pinpoint a handicap at date or time.
Speaker Change: But I think, as Patrick alluded to, it's still a $30 billion market in the face of a very difficult economic environment at that level.
Speaker Change: We believe in it, it's going to come back, we just don't know when. But our actions speak very loudly, billions of dollars investment, and we keep investing in it. So we believe in the turns around the corner that will come.
Speaker Change: Thank you all. I just have a quick follow-up. Could you share your latest thoughts on New York license if iGaming, you know, could be legalized there two years into construction, let's say, as an assumption. What are your thoughts on how that changes the return profile of a potential casino in that market?
Speaker Change: You've asked and answered my concerns. First, I believe in New York is a very strong market, which is under consideration of this company for a long time. However, the high gaming possibility to me, any market that has land-based game, like it has
Speaker Change: which appears to be to be inevitable in a lot of states especially those that have land-based properties, coupled with sports betting. I don't know why you wouldn't have iGame some time in the future. So that's our concern as we look at that market. You're absolutely correct.
Thank you very much.
Thank you. Bye bye.
Speaker Change: Thank you. The next question will be from Sean Kelly from Bank of America. Sean, your line is live.
Sean Kelly: Hi, good afternoon, everyone. Thanks for taking my question. Robert, Patrick, I want to start with just the Londoner. Obviously, some of the disruption timing probably came in a little bit differently than maybe everybody thought. But could you just walk us through your thoughts about ramp up from here and how we should think about it? It's a pretty big margin drag. I think it's pretty understandable given the impact of hotel rooms on margins. But just help us think about maybe your thought process behind how that property should ramp in the next couple of quarters, if you could.
Sean Kelly: Yeah, so you know, I think it's really interesting because I have to hand it to the team in Macau. They did a phenomenal job this quarter being disciplined in our reinvestment and actually generating this much EBITDA with that many rooms out.
Sean Kelly: You know, we are an inventory, a room inventory driven reinvestment model.
Sean Kelly: So we base our reinvestment on the scale of our ecosystem, the diversity of amenities, the quality of root product, the quality of experiences.
Sean Kelly: And so when you're down 20% of your inventory, there will be a meaningful impact into your productivity.
Sean Kelly: We carry the expense base, right? Our second largest expense is payroll and that doesn't change. And so we had less inventory to sell in the quarter. There wasn't disruption. There was just less inventory. So, you know, credits to the team for creating the quarter that they did in this market, given the competitive dynamics.
Sean Kelly: But I think now that we start to get these rooms back across the corridor, these 2,000 rooms, think about it, it's two-thirds of a Venetian.
Sean Kelly: When you think about the productivity of the Venetian resort, the Venetian Macau, and the room count that it has, and the number of tables, and the scale that it has, imagine if two-thirds of the rooms were not available.
and that's the case with the Lunder.
Sean Kelly: and so they were able to create this performance without that inventory. The good news is it's coming online, some of it's online now, and the rest of it should be online by May, as we mentioned in our opening remarks.
Sean Kelly: And that's positioned us well to get to our ultimate goal, which is to have two properties that have an equivalent run rate. And maybe one day, the one that does better than the Venetian because of the key count.
Sean Kelly: But I think the opportunity is there for the productivity to really increase, now that the rooms are becoming available, and now that we've completed this renovation, which in our mind, creates one of the best properties in the history of our business. And we're not just saying that because we did it. We think it's really good.
Sean Kelly: So I think from our standpoint, we have the Venetian, we have the Londoner, we have the Four Seasons, we have the Parisian, we have this high-quality portfolio. And getting these rooms back online will enhance our competitive positioning, but also allow us to grow cash flow and EBITDA because we're carrying the expense anyway and now we'll have the inventory to sell. So I think it was pretty meaningful, but I do want to give credit to the team there for the quarter they put up.
Grant, do you have any comments?
Yeah, Patrick.
Sean Kelly: Like you said, the room inventory was at the low point during the fourth quarter. Like we said last quarter, it reached the lowest point around 8,700 keys in November and December.
Sean Kelly: And for the whole quarter, we continued to up to 315 London and Grand Suites, and then shortly after the year end, we got licensed for a further 700 suites.
Sean Kelly: and keys. So for this Lunar New Year we have at our disposal just over a thousand keys to use from now on.
Sean Kelly: We expect that the continued ramp-up in rooms to continue throughout the first quarter and the first part of the second quarter, culminating the goal is to have the full 2,405 keys.
Sean Kelly: for the operational by May Golden Week and we believe we can achieve that construction-wise. We're well on track. It's a matter of statutory licensing at this point.
Speaker Change: Thank you both. And then maybe just as a quick follow-up going back to New York, Rob, we did notice that
New York did not include.
Speaker Change: The casino licenses or the downstate casino licenses in the state budget figures So we were just kind of curious does this imply, you know as it may especially given the timing of the fiscal year that The downstate process is slipping further at least for I think the the third license that many of us are very focused on here for LDS Thanks
Speaker Change: Hard to say. I can speculate who you are, but I don't know if you're right or wrong. I think it wasn't a budget. It wasn't a budget. I don't really know the answer to that, Sean, to be honest with you. It's hard to determine. I keep hearing it's going to be this June for the determination of a license by year-end. But, again, as you're saying, it's hard to know because they haven't been clear about this in a long time.
I can't wait to see you do it.
Thank you. Thank you. Thank you.
Thank you very much.
and Sean.
Speaker Change: Thank you. The next question will be from Brandt Montour from Barclays. Brandt, your line is live.
Brandt Montour: Good afternoon. Thanks for taking my question, everybody. So, a follow-up on Sean's question on the Londoner, in the Pacifica Casino floor, you know, especially which I know you owned, where you, sorry, you opened in September.
Brandt Montour: But without many hotel rooms above it, I have to imagine it's hard to activate that casino floor in the fourth quarter.
Brandt Montour: can you give us a sense on how you activate the casino floor and if a thousand rooms would be enough natural foot flow to actually create a buzz and get that asset almost sort of
Brandt Montour: all the way up and sort of producing before you can get the last batch or is it?
specifically correlate with how many rooms are open.
Speaker Change: I'm just laughing because the question to me is pretty simple. In our industry, whether it's Macau or Las Vegas or Idaho, where you have sleeping rooms above you is where you get gambling below you. So it correlates. The more rooms, the more gambling. A thousand keys is still a lot of people. I think, yes, it can create a buzz, but that buzz will obviously...
Speaker Change: and we believe, and will always believe, that assets drive results.
Speaker Change: This asset is extraordinary, and yes, we'll see some buzz in February and March, but you'll see it more in May. But we're in this for the long haul, and Monday will be a world-class asset and take its place alongside some of the legendary performers, just like Maria Beysan did and Dimash did.
Speaker Change: Okay, that's super helpful. And then a follow up question would be on the Thailand opportunity. I know it's really early, but I'm sure you guys have done plenty of work so far on that market. And maybe you could just talk high level about that opportunity versus
Speaker Change: your large coming second build-out investment in Singapore and sort of how you think about those two markets vis-a-vis each other and if they sort of are totally separate opportunities that wouldn't have to be considered in relation to each other.
Speaker Change: So a couple of things here. So I think first off, Thailand is an unbelievable tourism destination. It has very desirable attributes, great culture, great food, you know, just beautiful scenery. It's a great place to visit.
Speaker Change: and I think it has a great opportunity to add destination resorts and create a very large-scale industry there.
Speaker Change: The great news is there's an enormous tourism base there already and it's separate and distinct from people who go to Singapore. Is there overlap? Sure. Do people go back and forth between Bangkok and Singapore all the time? Absolutely.
Speaker Change: Is there an argument that it actually just strengthens our ecosystem because people have more choice within our environment? There's an argument for that. Although I would say that, you know, I think they're both different offerings.
Speaker Change: I think if you look at what we have in Singapore, it's specifically tied to the highest level of high value tourism.
Speaker Change: It's rarefied air when you look who's in that environment and the type of consumption that's there, the type of both business and leisure tourism that takes place.
I think in Thailand, it's a completely separate market.
Speaker Change: I think there will be some overlap, inevitably, because people are going to want to see it on both sides. But as a practical matter, given the population base, the visitation they have today, and where people are coming from in terms of inbound tourism, it's a separate and distinct opportunity, and that's how we see it. And we're excited about it, but there's a lot that has to be done, and a lot that has to be learned before it's something that we can evaluate.
Speaker Change: That being said, it would be great for our industry and, to be fair, great for LVS if it's possible.
Speaker Change: that the mix of those two markets, think about this for a second. There's about 4 billion Asian people, which I think is about 300 billion more in the entire United States. As I look out the window here in Las Vegas, there's more casinos in Las Vegas than there is in all of Asia.
Speaker Change: Okay, so my point is there's an awful lot of people in Asia, high propensity to gamble. I wouldn't worry too much about Singapore doing very, very well. There's just not enough capacity. Sheldon Adams used to say he'd like to build a strip in every Asian country if possible.
Speaker Change: The point being, we'll do very well in Singapore for years and years to come, we'll make all kinds of money there, but Thailand is an extraordinary market and it will do very well. Again, Las Vegas must have, I don't know, 200 casinos.
Excellent. Thanks, Patrick. Thanks, Rob.
Thank you. Thank you.
Speaker Change: Thank you. The next question will be from Dan Pulitzer from Wells Fargo. Dan, your line is live.
Hey, good afternoon, everyone. Thanks for taking my question
Speaker Change: First I want to touch on Venetian. Last couple quarters it looks like mass volumes have slowed a bit there. Can you maybe talk about a little bit of what's going on with that property relative to some of your other properties in the market and also I think the arena recently opened there so you know any kind of incremental details on how that's been trending.
Speaker Change: One thing I do want to mention I think the Venetian really is for us the benchmark in Macau and we're very focused on growing revenues in Venetian and maintaining margin there and generating a lot of cash flow and we think it has the capacity to do it.
Speaker Change: In the first half of the quarter, things were going great and things were accelerating. In the second half of the quarter, there was some disruption and hesitation because of what I mentioned earlier on in the prepared remarks, which is the 25th anniversary of the Andover.
Speaker Change: and so there's a there were a lot of things going on in this quarter and one of the things that went on is that face mask was impacted most meaningfully by that event and by that 30-day period.
Speaker Change: and so I would not necessarily look at this corridor as representative of the base mass run rate associated to Venetian going forward.
Speaker Change: Brandon, I don't know if you have anything else to add.
Thank you very much.
Speaker Change: Yeah, that's right, and I think with the with the premium mass
Speaker Change: I think the business continues to be very strong there. Also, I think you have to consider that most of the lodges in Venetian, together with the Four Seasons,
Speaker Change: It plays as a complex for that segment, so you can see how strong the Four Seasons Plaza was.
Speaker Change: in the non-rolling segment this quarter, up 26% against prior year. So I think you should look at it in a composite as patrons move around between the two properties.
Speaker Change: But the base mass, as Patrick said, was affected during the quarter. We had a very strong first half of the quarter, and then it softened thereafter.
Speaker Change: As it regards to the Venetian Arena, we launched a fully upgraded arena in late November. We've had a few events.
Speaker Change: some of them more like a warm-up event during fourth quarter. We had concerts and then we also hosted the NBA Legends game that accompanied our announcement of the strategic collaboration with the NBA over the next few years.
Speaker Change: So the facility gives us, I think, very strong scope to program content for our calendar, entertainment, sporting events, MICE groups.
and at the same time.
Speaker Change: who continues to use the London Arena. And really, this is another example of the scale advantage and the product diversity that we have.
We've learned how to program the London Arena successfully.
Speaker Change: will be hosting some major concerts in the Venetian Arena as well as the NBA Games in October in 2025. So we'll have the full flexibility and benefit of having these two great venues for different types of programming and events.
Speaker Change: and we believe that it's going to support the growth of the business in 2025 and beyond.
Speaker Change: Go ahead, that's helpful, Collar. And then just a follow-up, you know, I think for the Lundin or All-In, you'll be, have invested around eight billion dollars.
Speaker Change: How do you think about, I guess, the return on this? You know, is this consistent with some of your other properties and the mid-to-high teens? And if not, you know, why would that be? And then, how do you think about the timing in terms of the ramp? And do you need to see that base mass business come back into the market, given that you've certainly invested in making this property a more premium mass-centric?
Speaker Change: Yeah, so I think the key thing here to note is it depends on how long your IRR measurement period is. And so I think for us, when we first opened the property, it had a ramp-up period where if you sort of looked at it at peak, it was at I think a billion one run rate of EBITDA.
Speaker Change: And so if you sort of drew your trend line off that, it would be an unbelievable investment.
then events overtook that measurement.
Speaker Change: and we realized we needed to reinvest or reposition, which we did. So if you think of this as a 30-year asset, which we do, and you look at the potential cash flow generation out of this asset, given its positioning, its theming, its amenities, and its structure, which is not replicatable anymore in Macau, we feel like this is a very high-return potential asset.
And that's why we put the capital into it.
Speaker Change: If you look at its structure, you look at the room count, you look at the organization of the casino floors, of the retail, and of the amenities around it to support the activity of our patrons, there's nothing like it.
Speaker Change: right, and so we feel like this asset will provide very high returns over time, otherwise we would have done it. If the model didn't work, it wouldn't have happened.
Speaker Change: But I think it depends on how you view the market and how long you do the asset to be running in this way. But we've done the major structural lift.
Speaker Change: So we think we're in good shape to carry this asset forward for years to come. Hey Dan, one additional comment to Patrick's, and I think you made a comment that's being mass-centric, I would disagree.
Speaker Change: It's market segment is open to everything. What makes these buildings so powerful, like the Londoner, Innovation, successful buildings in the world.
Get everybody
Thanks for having me.
Speaker Change: It's going to dominate, just like, these people didn't get there simply with high levels. You walk in there, there's poker, there's basements, there's all kinds of lodging, all kinds of retail, all kinds of food and beverage. That's how he modeled the London, that's why it's nearly a billion plus dollar building when it gets fully operational.
Got it. Thanks so much. That's really helpful.
True. Thanks, Dan.
Speaker Change: Thank you. The next question will be from Chad Bainon from Macquarie. Chad, your line is live.
Chad Bainon: Hi, good afternoon. Thanks for taking my question. Rob, you mentioned in your prepared remarks that there was a decline in the turnover rent. It looks like I believe pretty much all of that may have been at the Four Seasons.
Chad Bainon: the other properties in Macau and in Singapore had some nice increases year over year. So firstly, just kind of wanted to ask about that, if that was, you know, something related to maybe some VIP business that was there last year, anything structural on the property. And then secondly, I know the market and everyone are expecting, you know, visitation and GGR to be up next year. Is there anything in the model?
Chad Bainon: that would put a lid in terms of what's happening with retail given where the base is right now. Thanks.
Chad Bainon: Yeah, I'm going to defer to Grant Shawmusher to answer this question. Grant?
Grant Shawmusher: Yeah, thanks, Rob. Yes, the turnover rent change is largely related to the Four Seasons Mall. Last year, or I should say 2023, that was a record year. That was an all-time high for the Four Seasons Mall in terms of retail sales coming out of that post-COVID spend. So when you look at year-on-year comparison, 24 against 23, the turnover rent is heavily impacted.
on Today With Me.
Grant Shawmusher: The 23, I think it's just the way the cells evolved straight after the pandemic and, of course, the softening macroenvironment thereafter.
Grant Shawmusher: I think we're strategically very well positioned for the retail sector over the next 18-24 months.
We are opening a number of very significant flagship stores.
across a number of the major brands.
you've seen the first.
Grant Shawmusher: of these opening in November in full seasons with the Audemars Piguet AP House, the largest in Asia. That will continue in 2025 with some other major flagships and also significant store openings.
Grant Shawmusher: So, we feel that between now and end of 2025, you're going to see a further strengthening in the tenant mix and the product offering in the mall. And hopefully that positions us very well for the eventual recovery in the macro and the retail sales that will come with it.
Speaker Change: Great, thank you very much. And then back to the U.S. I know we talked about a few potential legislation positives or opportunities. Anything change in terms of your view on Texas, the timing of that, and kind of where things stand down there?
Speaker Change: So as we said before, we think Texas has a great potential as a market for our business, but there's really nothing to report at this point. The session just began and we'll see how it goes.
Great. Thank you very much.
Thanks, Chad.
Speaker Change: Thank you. The next question will be from Joe Stauff from SIG. Joe, your line is live. Thank you. Good afternoon. Rob Patrick Grant. I had two questions on MBS, please.
Speaker Change: On a longer term basis for MBS, for the three towers, as we think about the ramp and EBITDA, Patrick, you had mentioned Singapore certainly is rarefied air, but could you comment on longer term what these new investments and where you think the biggest opportunity is for you to ramp EBITDA?
Marina Bay Sands customer base
Speaker Change: is very diverse, diverse markets around Singapore who all want to do business in Singapore or all want to go there for leisure purposes.
Speaker Change: and the spending habits are very powerful. And I think the biggest growth that you'll see as you sort of look across our business, it's in every facet.
Speaker Change: The other thing is, if you look at the non-gaming side, it's been extraordinary. If you look across the board, things have performed incredibly well. We just had a question about retail in Macau, but if you look at the retail in Singapore, it's performed incredibly well and shown to be very resilient.
Speaker Change: So, I think the offering there is quite strong, addresses the market properly.
Speaker Change: and I can't really point to one thing to say that it's the way to measure the investment. I think it's a very holistic approach.
Speaker Change: Rob earlier mentioned that, you know, we address all segments. I think in Singapore the market is filled with high-value tourists and we really address with a variety of amenities something that's very unique and that experience and our ecosystem is not replicatable.
Speaker Change: and so I think we get the benefit of that and I think you see the results in our EBITDA this quarter and I think there's more to come and I think when we get the rest of Tower 3 online and we get some of the other investments
Speaker Change: fully in, the Ruger room is completely done, I think you'll see the power of this building as people start to figure it out.
Joe Stauff: I think that building, have you been there, have you seen the building? Joe is there with us. Okay, if you've been in the building and you see it, there's just nothing like it. It's at the center of...
Joe Stauff: Uh, a fluids center that it's got the real product, it's got a sweet bite.
Joe Stauff: So I think we're in the right place, right time to keep going that. And where we measure up is the profitability, the profitability is soaring.
Joe Stauff: But I think you're just as best as yet to come.
Joe Stauff: are extraordinary and it's hard to replicate so I think we have every confidence we're just beginning of this thing not the end it's not admirational it's just the way it's going to be.
Speaker Change: Singapore is an exceptional asset in a very strong market, lots of countries driving it, and also it's a beneficiary of lots of great publicity and awareness of how, you know, people tell MBS, they see it on newspapers, magazines, you know, the internet, it's very powerful.
Speaker Change: a real brand to us now. So I think you're at the beginning of an exceptional growth story in Singapore. As the asset matures this summer, again, I think the future is very, very strong.
Thanks very much.
Thank you.
Speaker Change: Thank you. The next question will be from George Choi from Citigroup. George, your line is live.
George Choi: Thanks for taking my question. First of all, we noticed the introduction of some new background cybers since late September in Macau and would you please comment on how popular they have become and its potential impact on whole race longer-term and I have a follow-up to this. Thank you.
Speaker Change: George, I think you know the story. I appreciate the question. It's a very, very powerful possibility. It's not a reality yet, but the side bets, as you know, are akin to parlay bets or, you know, wages on the sports betting. It's more of a prop bet, more of a long shot type bet, which people gravitate to. Some people like it. You know the house advantage is much higher than the flat bets, the usual fan player type pair. So the industry, we're at the forefront of this.
Speaker Change: we want to offer those bets and hopefully the customers will come towards them. It's got great potential, it's early days yet, but as you know, this Bach run is our primary business.
Speaker Change: It could be very, very powerful in years to come if the customers decide to take higher long rod type bets because they do benefit the house, no surprise.
Speaker Change: There's an article recently, I think it was a journal, about sports betting and parlay betting that's akin to that. So we're hopeful that more people will partake in that, it helps drive the curve, and it would be very advantageous for those companies who are block-route-centric, like Las Vegas Sands.
Speaker Change: And just to sort of finish the thought, yeah I think the key thing here is it's early days yet and so I think our goal is to continue to evaluate how the market is is adopting and actually choosing to utilize those bets but we'll see.
Speaker Change: Thank you very much and obviously very encouraging to learn that you have 700 more sweeps at the Londoner Grand open after the year-end. I'm just wondering if you have opened any new premium mass capacity at the Londoner Grand?
on the gaming floor.
yes yes yes we did we just opened
Speaker Change: Yeah, just around the time of the Lunar New Year, we opened a new premium mass salon on level one of London Le Grand, so we're obviously ramping up on the gaming side in sync with the room inventory.
Thanks for your comments. Thanks, George, as always. Appreciate it.
Speaker Change: Thank you and the next question will be from Steve Wychynski from Stifo. Steve, your line is live.
Yeah, hey guys good afternoon, so so Patrick or Robert
Speaker Change: you can maybe even grant. If we go back to the Lund pair, you know, obviously you have that coming back online over the next couple of months and obviously your competitors in the market know.
you know that property is coming back online as well.
Speaker Change: The question is, have you seen any changes in the promotional activity from your competitors in the market in anticipation of that property coming back online?
Speaker Change: You know, I think, first off, I think we mentioned this in the prior quarter's call, Macau has always been incredibly competitive and very promotional.
Speaker Change: and I think, to the team's credit there, they've been very disciplined.
When we closed the P6 Casino...
Speaker Change: there was some promoing there to move people around and we talked about that but I think it's a practical matter. We're very focused on leveraging the assets that we invest in for the long term to drive customer visitation and patron experience.
Speaker Change: and you know I think for us the goal is to be disciplined in the face of this market which by the way is ever-evolving.
Speaker Change: You know, if you go back more than a decade, there were different segments that are in favor, different ways that people thought about those segments and invested against the opportunity. And I think that's what we have today. I think we have a very competitive market as we've always had. I think people are investing against the segments the way they think that will create the most profit for them.
Speaker Change: and I think for us, we're doing the same thing, but our model has been pretty consistent, which is about investment in product, investment in a great team, great service levels, and focusing on the way that we can drive margin and cash flow. Grant, do you have any other comments you'd like to add?
Grant Shawmusher: I think you said it well. I think we remain focused on Ibiza generation and the profit share.
Grant Shawmusher: And if you look at, you know, the third quarter results when all the results came out from from all of the operators
Grant Shawmusher: I think those who gained revenue share didn't necessarily see that translate into profit share gain.
Grant Shawmusher: And I think we continue with our strategy. I think it remains competitive, regardless of whether we're bringing London or Grand Suites online or not. I don't think that changes. I think that's a constant. And so our constant is that, yeah, our strategy remains.
leveraging our core products.
leveraging the quality and scale of what we have.
Grant Shawmusher: and the coming online of the Rooms for London Grand is the perfect opportunity for us to really drive home that strategy. And we really look forward to having the full inventory in place and then from May Golden Week into the summer and for the rest of the year, we hope to see that really deliver for us.
Grant Shawmusher: You know, unfortunately, I really can't give you an estimate. All I can tell you is that there was a noticeable change. But the important thing is that we're looking forward to a great 25. We're excited about the opportunity. We feel really good about where our assets are positioned. We have a great team. We have great service levels, and we're excited about what we can do now that we're finally getting all of our assets back in inventory. We're looking forward to it.
Okay, thanks guys. Appreciate it.
Take care. Thank you.
Speaker Change: Thank you. If there were no other questions at this time, thank you ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.