Sands China President Wong Forecasts Macau Stability Through End of 2019
Sands China Ltd. president Wilfred Wong believes the gaming environment in Macau will be stable for the remainder of 2019, even as some operators fret about weakness in the VIP segment. Sands China president Wilfred Wong believes Macau will be stable thanks to dependable mass market players.
In the third quarter, Las Vegas Sands Corp. (NYSE:LVS), parent company of the China unit, reported adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.28 billion, of which $755 million was attributable to the company’s five Macau properties. LVS’ revenue in the Chinese territory for the September quarter was $2.11 billion, slightly below the $2.13 billion Wall Street expected.
Rivals, such as Wynn Resorts Ltd. (NASDAQ:WYNN), have been hampered by erosion in the Macau VIP market this year, but Wong believes Sands China’s focus on the mass and premium mass segments offers some stability.
LVS said Macau mass gaming revenues, including slots and tables, jumped nine percent on a year-over-year basis in the third quarter, while profit margins increased by 70 basis points to 35.7 percent. That’s good for one of the best ratios of any operator on the peninsula.
Earlier this week, Wynn Macau Ltd. COO Linda Chen made comments similar to those of Wong’s, noting that she expects steadiness in Macau through the end of this year.
Amid a slowdown in China’s economy, the trade war between that country and the US. and geopolitical demonstrations in Hong Kong, among other factors, has caused gross gaming revenue (GGR) in the Special Administrative (SAR) to dip this year. October GGR there was $3.28 billion, a 3.2 percent year-over-year drop, and the sixth month this year of declines.
Analysts estimate that last month, VIP GGR plunged 20 percent, but mass revenue increased. Sands China, the operator of the Plaza Macao, Sands Macao, and Venetian Macao, is less dependent on the high-end segment than some of its rivals.
