Sands China Ltd is unconcerned by potential negative impacts of the US-China trade war on its Macau gaming operations, nor by the impending re-tendering process for Macau casino licenses, according to the President and Chief Operating Officer of majority shareholder Las Vegas Sands (LVS), Rob Goldstein.
Speaking during the company’s 3Q18 earnings call, Goldstein – who is also a non-executive director for LVS’ Macau subsidiary – said Sands China remained in a strong position to ride out any potential storms in the coming years and that its gaming concession was “not at risk.”
Sands China saw its net revenue grow 13.0% to US$2.15 billion and its net income to US$454 million in the three months to 30 September 2018, led by impressive results at Venetian Macao and Sands Cotai Central.
“We’ve seen it all over the years,” said Goldstein in response to a question about potential implications of the US-China trade war. “We’ve seen these restrictions, union pay issues, junket difficulties, border restrictions, the great recession – and we are in 2018 and we’re probably going to deliver over US$3 billion of EBITDA.
“And we keep growing. We keep reinvesting. We have a highly-diversified business which is number one in virtually every segment there, from EBITDA to mass revenue to premium mass revenue to slots, hotels. Our business is stable and strong. And we always believed and we still believe there’ll never be another market as powerful as Macau.”
Goldstein also raised the issue of the re-tendering process for Macau gaming licenses that will follow the expiry of the company’s current 20-year concession in 2022, noting that Sands China’s planned US$2 billion investment into its Cotai properties in the next few years shows just how confident it is of maintaining its Macau presenence. Galaxy, Melco Resorts and Wynn also expire in the same year, with SJM and MGM expiring in 2020.
“We’re going to spend US$2 billion in the next couple years – if there is not a bigger vote of confidence than that, I don’t know what that is.
“We believe strongly today, we believe strongly tomorrow, we believe our concession renewal is not at risk.”
Sands China will this year begin a complete overhaul of Sands Cotai Central to transform it into The Londoner Macao, while The Four Seasons and St. Regis will also enjoy substantial upgrades. Goldstein said the company had done everything asked of it as the re-tendering process nears.
“I just don’t know what else we can do,” he said. “We run our business properly and we’re doing that. We’re doing it very, very well. And these numbers are indicative of a very strong business that’s diversified. It’s a very large footprint.
“And so, we talk about concessions and what we are expecting – all we can do is what we’re told and addressed by the government of Macau. They have asked us over the years to invest heavily in non-gaming assets. Well, we built 13,000 sleeping rooms. We built over two million square feet of retail mall. We built millions of square feet of MICE space. We basically we built an arena when people thought that was a crazy idea.
“We’re big fans of China. We’re big fans of Macau. We’ve been wildly successful and our US$2 billion statement … to bring The Londoner to fruition and the Four Seasons and the St. Regis is proof positive.
“Actions speak louder than words. Those are our actions and that’s what we’re doing right now today in the third quarter of 2018.
“I don’t have a crystal ball nor does anyone else I know, but we feel very bullish on the market and we feel very bullish about our license renewal.”