Macau concessionaire Sands China revealed Thursday that the contribution of its non-gaming segment to company-wide revenues reached 22% in the June 2023 quarter, representing a 5% increase versus the 17% contribution during the same period in 2019.
The update formed part of Sands China’s 2Q23 earnings call where it discussed the implications and reasons behind an improving revenue mix since the reopening of Macau’s borders on 8 January. This improved mix helped the company return to profit for the quarter with net income of US$87 million and Adjusted EBITDA of US$541 million.
“We’ve seen a shift between gaming and non-gaming,” explained Sands China’s Chief Operating Officer, Grant Chum. “Remember we are the dominant revenue generator in non-gaming in the industry, and non-gaming is rising as a percentage of our revenues.”
Noting that margins had risen 240 basis points quarter-on-quarter in Q2, Chum revealed that 87% of the company’s GGR was now derived from the mass gaming segment versus 71% back in 2Q19.
“We do have a more profitable business mix than in 2019, as does the whole industry, because we have a greater proportion of mass relative to VIP,” he said. “Both of these mixtures are positive for margins.”
Chum also revealed that business recovery had accelerated throughout the quarter, with mass gaming revenues back to 85% of 2019 levels across 2Q as a whole but reaching 97% in June. Likewise, Sands China generated almost US$200 million of EBITDA in June, with non-rolling drop rising 15% compared to May, slot handle by 9% and rolling chip volume by 10%.
“Intra-quarter, margins are related to revenue recovery rate and June was the standout month for us,” he said, adding that Sands China would soon have its entire 12,000-room Macau hotel inventory back online. Its average number of operational rooms in 2Q23 was 10,700.
“Our numbers speak loudly,” said Rob Goldstein, Chairman and CEO of Sands China’s parent, Las Vegas Sands.
“Six months ago we were virtually closed. Now visitation is increasing, and I do believe we will be the beneficiary because of our scale. Our US$15 billion investment will pay off quite well. We have adequate rooms, we have capacity in every segment, be it gaming or non-gaming, and that is a strong advantage going forward.”
RelatedPosts
