Key Takeaways:
Sands China Ltd (1928.HK) reported second-quarter adjusted property EBITDA of $430 million, down 24% from a year earlier, as an exceptionally low VIP rolling hold rate of 1.35% and World Cup-related disruption to high-end visitation weighed on profitability.
"The meaningful patron volume growth we have seen in The Londoner and Grand Suites at Four Seasons provides support for these investments," Patrick Dumont, chairman and chief executive officer of parent Las Vegas Sands Corp (LVS.US), said on the earnings call. "This quarter doesn't represent the true earnings power of our properties."
Net income fell 50% year over year to $107 million, while total net revenues slipped 0.8% to $1.78 billion, the company said in a statement. On a hold-adjusted basis — normalizing the VIP rolling win rate to expected levels — EBITDA would have been $517 million, or $87 million higher. First-half adjusted property EBITDA totaled $1.063 billion, down 3.5% from the same period last year.
Gaming volumes told a different story from the bottom line. Rolling chip volume surged 73% year over year, giving Sands China a market-leading 26% share of Macau's VIP segment. Non-rolling table drop rose 15%, and slot and electronic table game handle climbed 30%. Mass gross gaming revenue grew 8%, double the broader Macau market's 4% expansion. The company's total GGR rose 4% against a flat market.
The weak quarter underscores the volatility inherent in Sands China's push into higher-end segments, where concentrated play from a small number of patrons can swing results sharply. The company is midway through a multi-year renovation of The Venetian's 2,900 rooms and suites, targeting completion by Chinese New Year 2028, and has committed about $600 million annually in growth capex through 2028. Management reiterated its goal of reaching $700 million in quarterly EBITDA as the investment program matures and market growth resumes.
Parent Las Vegas Sands repurchased $787 million of its own stock during the quarter and secured a new $6 billion buyback authorization from its board. LVS shares fell about 5% in after-hours trading following the miss. Investors will watch for a rebound in high-end visitation now that the World Cup has concluded and for progress on the Venetian renovation, which will add premium suite inventory through 2027.
This article is for informational purposes only and does not constitute investment advice.
