Sands Profits Now, Plans for Future - Saturday 6th of May 2006
by Howard Stutz
Las Vegas Gaming Wire
LAS VEGAS The future of Las Vegas Sands Corp. is coming out of the ground on the corner of the Strip and halfway around the world on a parcel of reclaimed land in southern China.
But the owner of The Venetian said Thursday the company is not ignoring today.
In reporting its first-quarter earnings for the three-month period that ended March 31, Las Vegas Sands executives said the company is building the groundwork to capitalize on that future.
"While we continue to deliver exceptional financial and operating results, the opportunities that lie ahead are significant and broad-based," Las Vegas Sands President Bill Weidner said. "Our proven capabilities in the development and operation of integrated destination resorts position us to build and execute on a robust pipeline of growth opportunities worldwide."
In 2007, Las Vegas Sands will open the $1.8 billion Palazzo next to The Venetian, giving the company two resorts encompassing 7,000 hotel rooms on the Strip.
Also next year, the company will open the $3 billion Venetian Macau, which will anchor the developing Cotai Strip next to Macau, where the company operates the Sands Macau.
First-quarter results at the company's The Venetian in Las Vegas and the Sands Macau in China helped boost the company's profits.
Las Vegas Sands' net income was $121.8 million, or 34 cents a share, in the quarter ended March 31, up from $7.1 million or 2 cents a share a year ago. The 2005 figure was affected by a significant loss due to the early retirement of debt.
Analysts polled by Thomson First Call predicted Las Vegas Sands would earn 34 cents a share in the quarter.
Revenues rose 31.4 percent to $530.4 million from $403.8 million.
Cash flow, defined as earnings before interest, taxes, depreciation and amortization, was $187.9 million in the quarter, an 23.9 percent increase from $151.6 million a year ago.
At The Venetian, Las Vegas Sands said casino revenues were $97.1 million based on $363.5 million wagered on table games and $529.5 million gambled on slot machines.
The hotel-casino had food and beverage revenues of $43.3 million. Convention, retail and other operating revenues were $34.2 million
The company said The Venetian's occupancy during the quarter was 99.9 percent with an average daily room rate of $249. A year ago, The Venetian averaged 97.8 percent and an average daily room rate of $243.
Weidner said the Strip casino has benefited from increased business driven by enhancements to the property, such as a new showroom, the Tao restaurant and nightclub, and a poker room.
"We are seeing the benefits of our targeted capital investments at The Venetian," Weidner said. "The recent addition of 450,000 square feet of carpeted meeting space continues to fuel increases in group business and related food and beverage revenues."
Las Vegas Sands continued construction on the Palazzo, a 3,000 room hotel-casino being built next to The Venetian. The new resort is expected to open the third quarter of 2007.
"We believe this property will provide an excellent platform for growth in Las Vegas for years to come," Weidner said.
Las Vegas Sands is also seeking approval from Clark County to build a 1.1 million-square-foot expansion to its convention center, which could be open by the spring of 2008.
"We think this allow us to book more large groups," Weidner said.
In China, casino revenues at the Sands Macau were $278.2 million, a 62.7 percent increase compared with $171 million during the same quarter a year ago.
Weidner said competition has increased in Macau, but the Sands has been able to weather the increased casino offerings by growing its win per unit per day totals in the past year.
"The substantial increases in revenues in Macau reflect robust market demand and capacity increases at The Sands," Weidner said. "We are continuing to make progress in Macau at all levels. We are particularly pleased with the continued strength of our mass market business."
The company expects to complete an expansion to Sands Macau in August, growing the casino to 700 table games and 1,200 slot machines.
Weidner, who spoke for a vast portion of the Las Vegas Sands conference call with Wall Street analysts, said the company believes it has put out the superior bid in its quest to gain a potentially lucrative gaming license in Singapore.
The company hopes government accepts its offer to build the $3.6 billion Marina Bay Sands, an integrated resort with 2,500 hotel rooms, 1.2 million square feet of meeting space and 1 million square feet of retail.
Las Vegas Sands reported earnings after trading closed on the New York Stock Exchange. Company shares closed at $66.32, up 72 cents or 1.1 percent.
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