Wednesday, Jan. 25, 2017 | 3:06 p.m.
The Las Vegas Sands, which owns and operates the Venetian and Palazzo resorts and Sands Expo and Convention Center in Las Vegas, as well as casinos in Pennsylvania, Singapore and Macao, reported its fourth-quarter and full-year financial results today.
Company: Las Vegas Sands (NYSE: LVS)
2016 fourth-quarter results
Revenue: $3.08 billion, an increase of 7.4 percent compared to to $2.86 billion for the same period in 2015.
Income: $607 million, an increase of 5.6 percent compared to $575 million for the same quarter the year prior.
However, on a GAAP (general U.S. accounting principles) basis, operating income in the fourth quarter of 2016 decreased 4.7 percent to $669 million, compared to $702 million in the fourth quarter of 2015. The company said this was from higher depreciation and amortization expenses and asset impairment charges.
Earning per share (diluted): $0.64, an increase of 8.5 percent compared to the prior-year quarter earnings per share of $0.59.
2016 full-year results
Revenue: $11.4 billion for 2016, compared to $11.7 billion for 2015.
Net income: $1.67 billion, a decrease of 15.1 percent compared to $2 billion for 2015. The company said this reflected the decrease in operating income. The company said the decrease in operating income was principally due to lower net revenues, nonrecurring legal costs in 2016 and higher pre-opening expenses, most of which relate to the Parisian Macao.
Earning per share (diluted): $2.10 per diluted share, compared to $2.47 for 2015.
What it means
As was the case with the 2016 third-quarter financial results, the earnings conference call for the fourth quarter largely focused on numbers from Macau as well as other prospects for expansion in Asia.
Sheldon Adelson, Sands chairman and chief executive officer, boasted that his company had delivered another strong set of financial results and that Macau specifically had achieved “strong mass gaming revenue growth” in prepared remarks.
The mass-market distinction is important when discussing the Macau gaming market which has traditionally been known for catering to Chinese high-rollers. However, a crackdown on corruption by the mainland Chinese government a few years ago severely reduced high-roller traffic to Macau and the market declined as a result.
In addition to speaking about Macau, Adelson discussed the prospect of casino resort gambling in Japan and possibly Korea.
The Japanese legislature legalized gambling — in the form of Las Vegas- and Macau-style resorts — last year. The legislature still must determine how those resorts will operate and how many will be allowed.
“They’re (Japan’s leaders) basing this on our Singapore property,” Adelson said. ”Prime Minister Shinzo Abe visited the property, and he was very impressed with it. So I think (the Japanese resorts) are going to be modeled after our property the Marina Bay Sands in Singapore. And I’m optimistic and people tell us we’re in the pole position in terms of getting the concessions.”
Since Japan legalized gaming, Adelson said he has been hearing rumors that South Korea may do the same. The Sands could fund a Korean Sands resort in part with money from the upcoming sale of 49 percent of a mall it owns in Singapore, the Shoppes at Marina Bay Sands.
“We could make $3 billion-$3.5 billion on the sale of the mall,” Adelson said. “That alone will be most expensive mall sale in the world. I’m pretty sure we’ll end up in that range.”
However, Adelson also said the company has not decided what the company will do with that and that the Sands has never had trouble raising funds for any of the development it has planned.
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