Sheldon Adelson: ‘I have never seen anything like it in over seventy years in business’

US Gaming Las Vegas Sands financial
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The first major US gaming operator to report its Q1 results, Las Vegas Sands experienced a net loss of $51m for the quarter. Nevertheless, despite the uncertain economic panorama due to the coronavirus pandemic, the company’s management remains confident, highlighting the possibility of an Asia-led recovery and teasing M&A plans.


Las Vegas Sands executives suggested the possibility of an Asia-led recovery after the company posted a first-quarter net loss of $51m.

The company experienced a 51 percent fall in in revenue year on year, down from $3.65bn to $1.78bn as a result of the impact of the coronavirus pandemic on the tourism and entertainment sectors during the quarter.


Sheldon Adelson
Sheldon Adelson

The firm also announced it would cancel its dividend. “I know that the dividend is important to all our shareholders, as it is to me. But the impact of the COVID-19 pandemic on our business has been unprecedented, and I have never seen anything like it in my over seventy years in business,” said Sheldon Adelson, Sands CEO and chairman.

Despite the difficult economic environment, Sands still has a strong financial position, with $2.6bn cash and $3.9bn credit available. Adelson stated that Sands has the liquidity to survive 18 months of zero revenues while still progressing its investments in Macau and Singapore properties.

“Now it’s not the time to pause and slowdown investment in Macau. Our optimism about an eventual recovery coupled with our financial strength enables us to continue the execution of our previously announced capital investment programs in both Macau and Singapore,” he explained. “We believe these investments will strengthen our leadership position in each of these markets and will provide a larger platform for future growth, as travel and tourism spending eventually recover.”

Reflecting this, Adelson reported that the company is “making great progress” with its $2.2bn capital investment programme for The Londoner Macao and The Grand Suites at Four Seasons. Responding to a question during the company’s earnings call, Adelson also confirmed Sands is looking at M&A.

“Most of the other companies …don’t have the balance sheet that we do, and they don’t have the potential market that we do,” he stated. “We can go in and acquire one or more operations, of course, the price has to be right. [But] I’m now taking on the strategy of both acquiring and building and developing.”

Discussing its operations in Asia, the company’s management showed confidence in a quick recovery, citing the region’s experience in dealing with the SARS epidemic and gradual lifting of coronavirus-related bans.

The company also expects safety measures such as masks, social distancing and temperature checks to be better received in Asian markets than in the US.

“The exposure [the region’s] had to the viruses …flying to Asia, temperature testing and masks are kind of the way it works over there,” said Robert Goldstein, Sands president and COO, adding that the US “has never experienced …this kind of thing”.

“Here in the US, we’re kind of taken aback and shell-shocked by it. Asia has seen it. They understand it. They dealt with it. [In] Hong Kong right now, you can go out for dinner, you can go shopping. So they [have] kind of come to terms [with measures to control the pandemic] much more comfortably, than we have,” he clarified.

Goldstein also assured investors that the company’s extensive square footage and the ample availability of tables and slots in its Macau properties will allow it to mitigate the financial impact of social distancing.

“In Singapore, social distancing did have an impact because we’re limited there in terms of size of the operation,” he elaborated. “In Macau, …we’re in a much different position. We have so much square footage there and so many more slots and tables that I think we can do much better business …than [in] Singapore vis-a-vis social distancing.”

Sands management expects the gambling and hotel business in Asia to pick up by late summer or early autumn. However, for the company’s Las Vegas business the panorama is more uncertain. “I don’t know how airlift will look in the next 90 days. I don’t know how the economic impact in terms of how Americans will spend money to think about being here,” Goldstein conceded. Nevertheless, he emphasised that “group business appears to be out there for August and into the fall”.

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