Premium mass boosts Sands China Q4

Sands China’s Q4 results beat analysts’ expectations, driven by strong premium mass revenue in Macau.

Total net revenues for Sands China increased 12.9 percent to US$2.10 billion compared to US$1.86 billion in the fourth quarter of 2016 and above The Street estimate for $1.94 billion. Net income increased 49.1 percent to US$519 million, while hold-normalized EBITDA came in at $758 million, representing growth of 30 percent over the prior year.

Analysts said the outperformance was due to the premium mass sector. Union Gaming says the premium sector gained 52 percent year-on-year and 34 percent sequentially, compared with just 7 percent growth for the base mass sector.

Bernstein Research noted the company is optimistic about further growth in the premium sector, which is being driven by more younger players coming from provinces outside Guangdong and higher average spend per customer.

“Q4 EBITDA was highest since mid-2014, but still below peak Q1’14 figure (and this Q results includes the Parisian). That being said, results are still strong,” the firm said.

Las Vegas Sands Chairman Sheldon Adelson told analysts that it “feels like we have returned to 2014 and the period before.”

Overall, Las Vegas Sands reported a 19.7 percent gain in adjusted property EBITDA to $1.34 billion.

The company’s operations in Singapore were steady, but analysts say continue to lack any catalysts for growth.

UBS says Singapore VIP volumes declined -4 percent and mass didn’t grow, though it was able to grow hold-adjusted EBITDA by 6 percent in Q4.

“Of course, the $1.7 billion in annual EBITDA is a significant FCF driver and the property also positions LVS for any potential bid in Japan,” it said in a note, adding there has been no update on the potential sale of the company’s retail mall in Singapore.