LVS posted a mixed set of Q2 2023 results. Revenue rose 8.7% year-over-year to $2.76 billion, although it came in below consensus estimates. Earnings stood at $0.55 per share, roughly in line with consensus and up from $0.46 a year ago. Earnings were driven by a continuing recovery in Macau as well as stronger revenues from the Marina Bay Sands property in Singapore.
Below are key drivers of LVS that present opportunities for upside or downside to the current Trefis price estimate for LVS:
For additional details, select a driver above or select a division from the interactive Trefis split for LVS at the top of the page.
Las Vegas Sands (LVS) is a leading developer, owner, and operator of destination casino resorts. It presently operates in the U.S., Singapore, and Macau. It operates in Macau and Singapore through its two subsidiaries, Sands China Limited (SCL) and Marina Bay Sands Pte. Limited (MBS), respectively.
The Sands Macao has approximately 220 table games and 870 slot machines. It also includes a 289-suite hotel tower, several restaurants, a spacious Plaza Club, a theater, and other services and amenities. The Venetian Macao includes approximately 374,000 square feet of gaming space and has approximately 710 table games and 1,540 slot machines. The resort has a 39-floor hotel tower with over 2,900 suites, approximately one million square feet of retail and dining offerings, a convention center and meeting room complex of approximately 1.2 million square feet, and a 15,000-seat arena.
In August 2008, LVS opened the Four Seasons Macao. The Four Seasons Macao includes the Four Seasons Hotel Macao, with 360 rooms and suites. The resort has 340 table games and 1,100 slot machines, 19 Paiza mansions, conference and banquet facilities, and approximately 242,000 square feet of retail space.
In April and September 2012, the company opened phases I and IIA, respectively, of Sands Cotai Central, which is part of our Cotai Strip development. Additionally, LVS opened phase IIB of Sands Cotai Central on January 28, 2013. Sands Cotai Central currently offers about a 6,200-room integrated resort complex featuring rooms and suites under the internationally recognized Sheraton, Conrad, and Holiday Inn brands. The property includes approximately 367,000 square feet of gaming space with approximately 430 table games and 1,410 slot machines, approximately 520,000 square feet of retail, entertainment, and dining space, over 369,000 square feet of meeting facilities, and a multipurpose theater. The company is rebranding several of its integrated casinos - The Londoner Macau and St. Regis Tower Suites Macau.
In September 2016, LVS opened another resort in the Cotai strip, The Parisian. The resort has about 2,500 hotel rooms and operates with more than 340 tables and 1,100 slot machines. The Parisian is internally interconnected with all other LVS resorts in Macao, which gives it a competitive advantage. It was the second most visited casino in Macau in 2016 after the Venetian in just around four months of operations. It also contains nongambling attractions such as paintings, fountain shows, a meeting room complex, and a 1,200-seat theater. This is in line with LVS's strategy of diversifying revenues from Macau to decrease risks.
Las Vegas Sands renovated Sands Cotai Central with a London theme and rebranded it as The Londoner Macau, mainly due to below-par results at the property. This overhaul was completed in 2021.
LVS opened Marina Bay Sands in April 2010. The integrated resort has 2,600 rooms, 160,000 square feet of gaming space, approximately 625 table games, 2,360 slot machines, and 1.3 million square feet of convention and meeting space.
We believe that Macau gaming operations are the primary source of value for Las Vegas Sands because:
Although the Macau business has faced headwinds due to Covid-19, the division remains LVS's most valuable business unit. There is a very high demand for gambling in Macau, the only place in China where gambling remains legal. A lot of tourists from nearby countries visit Macau for gambling. The casino business is primarily divided into Macau categories: VIP gaming and mass-market gaming. Las Vegas Sands has established a critical mass in the region, helping the casino giant attract more and more VIP players.
Other factors that drive Las Vegas Sands' value are its Singapore and U.S. operations.
LVS is recognized worldwide as a premium brand resort. It has a sophisticated style and offers exquisite luxuries to its customers. It mainly caters to high-end gaming customers. LVS has a Paiza Club that offers high-end services and amenities to VIP customers, such as luxurious suites, spa facilities, and private gaming rooms. It also has a Canyon Ranch Spa Club operated by Canyon Ranch. Marina Bay Sands has been built at an approximate cost of $5.5 billion. The resort offers exquisite luxuries to its customers. It has seven celebrity restaurants and a 15-meter-long rooftop swimming pool.
LVS is focusing its efforts on Asia for future growth after it completed the sale of its Vegas properties for over $6 billion in 2022. The company will focus on Macau - the world's largest gambling market before Covid-19 - and also on Singapore, with its Marina Bay Sands property.
Macau surpassed the Las Vegas Strip as the world's biggest gambling hub in 2006 after the government allowed the entry of overseas casino operators. Since then, the region has witnessed unprecedented growth driven by an expanding Chinese economy, a burgeoning middle class, and an increasing population of high-net-worth individuals.
The Macau government is reinforcing a series of initiatives to drive visitor growth in the region. The gaming industry is a key contributor to Macau's GDP. The government is investing in new transportation links to ease travel for Chinese visitors. It should be noted that most of the tourists visiting Macau are from Mainland China.
The Guangzhou-Zhuhai high-speed railway is expected to improve travel time from Guangzhou to Macau to 40 minutes, down from the 2+ hours taken by bus. The Macau Light Rapid Transit will link ferry terminals and key locations. It will have 12 stops on the Macau peninsula, 11 stops on Cotai and Taipa, and fully integrate different Macau regions.
Also, the Hong Kong-Zhuhai-Macau bridge, which opened in October 2018, will connect Hong Kong to Macau, thereby reducing car travel time from 4 hours to 40 minutes and driving greater Mass market visitations. The Macau International Airport has also seen capacity upgrades.
