MBS doubles earnings as Lady Luck deserts gamblers

SINGAPORE — Integrated resort Marina Bay Sands (MBS) more than doubled its operating earnings in the fourth quarter of last year as its casino achieved sharply higher win rates from both high-rollers and mass-market gamblers, prompting the president of parent company Las Vegas Sands to call it “the most profitable building in the world”.

For the three months ended Dec 31, MBS’ adjusted property EBITDA (earnings before interest, tax, depreciation and amortisation), the key measure for operating performance in the gaming industry, rose 100.3 per cent from the corresponding period a year earlier to a record US$518.5 million (S$701.4 million), Las Vegas Sands said yesterday. The result included a US$90.1 million property tax refund during the quarter.

While VIP betting turnover slumped 26.8 per cent to US$10 billion, the rolling chip win percentage, a measure of winnings at tables for high rollers, surged to 3.58 per cent in the quarter from 1.92 per cent in the previous corresponding quarter, well above the statistical average of 2.85 per cent. Mass market volume dropped 3.3 per cent but the casino win rate improved to 26.7 per cent from 24.5 per cent.

That helped boost MBS’ casino revenue by 33.7 per cent to US$674.4 million for the quarter as its non-gaming businesses achieved mixed results. “MBS is the most profitable building in the world,” Las Vegas Sands president and chief operating officer Robert Goldstein said, adding that there is “no place like it with those kind of numbers”.

Las Vegas Sands chairman and main shareholder Sheldon Adelson said: “The iconic appeal of MBS has driven strong growth in visitation from residents of China, Japan, South Korea, the wider Asian region and around the world.”

The high-margin hotel room segment saw a 3.9 per cent dip in revenue to US$92.1 million, hurt by the rise of the US dollar.

The occupancy rate rose 1.4 percentage points to 98.3 per cent while the average daily room rate fell US$3 to US$422. Meanwhile, mall revenue rose 5.5 per cent to US$45.7 million while convention and retail revenue was down 2.3 per cent to US$26 million. Total net revenue rose 27.1 per cent to US$838.6 million.

MBS rescued what would otherwise have been a tough quarter for parent Las Vegas Sands, as its core Macau business came under pressure amid a corruption crackdown in the Chinese mainland that has curbed the transfers of large sums of money.

At the group level, Las Vegas Sands reported that consolidated adjusted property EBITDA jumped 10.9 per cent to a record US$1.35 billion, even while net revenue fell 6.6 per cent to US$3.42 billion. Adjusted property EBITDA at Sands China fell 15 per cent in the fourth quarter from a year earlier to US$713.2 million while the one at its Las Vegas operations slumped 11.6 per cent to US$78 million.

Total betting revenue in Macau, the world’s largest gambling market, fell 2.6 per cent to US$44 billion last year, the first annual decline since the Special Administrative Region’s government opened up the casino industry to foreign investment in 2002.

For the full year, Las Vegas Sands reported that consolidated adjusted property EBITDA jumped 13.8 per cent to a record US$5.42 billion, driving net income up 23.2 per cent to US$2.84 billion as net revenue rose 5.9 per cent to US$14.58 billion. AGENCIES