Las Vegas Sands loss narrows to $113.9M in 4th qtr; Macau business improves, Vegas still weak

Las Vegas Sands loss narrows to $113.9M in 4Q

LAS VEGAS — Casino operator Las Vegas Sands Corp. said Wednesday that its fourth-quarter loss narrowed as its casinos in Macau showed a strong recovery and gambling in the weak Las Vegas market stabilized.

The loss was a result of writedowns of the value of its properties in Macau and Pennsylvania and expenses to prepare a Singapore resort for its April opening. Without those items, Sands was back to being profitable — barely — after an operating loss last year. But it’s still losing money in Vegas.

The casino business in the Chinese enclave of Macau, Sands’ biggest market, saw growth slow amid the economic crisis. The world’s most lucrative gambling market — surpassing the Las Vegas Strip — has since recovered because of a rebounding Chinese economy and relaxed visa restrictions on mainland Chinese tourists.

Sands Chief Executive Officer Sheldon Adelson said its record revenue in Macau was helped by strong gambling revenue and cost-cutting.

“Our strong quarterly performance provides momentum as we resume the construction process on our largest Cotai Strip development to date,” Adelson said. “We like to call that development the game-changer.”

Sands is developing 6,400 hotel rooms on 13.3 million square feet on Macau’s Cotai Strip under the Shangri-La, Traders, Sheraton, Sheraton Towers and St. Regis brands. The company hopes to attract more large convention business to Macau with the projects.

“We haven’t had enough critical mass of hotel rooms to be able to bring on other conventions, and now we’re starting to book more and more conventions in Macau,” Adelson said. “You’ve got 1.3 billion people, and these populations are not shrinking, they’re growing.

“It’s supply creates demand, it’s not demand creates supply,” he said.

The fourth-quarter loss of $113.9 million, or 17 cents per share, compares with a loss of $136.5 million, or 27 cents per share, during the same quarter a year ago.

Excluding the one-time costs, adjusted net income was $20.9 million, 3 cents per share.

Analysts polled by Thomson Reuters, whose estimates generally exclude one-time items, expected Sands to earn 3 cents per share on revenue of $1.23 billion.

Shares fell 90 cents, or 5.2 percent, to $16.57 in after-hours trading.

Sands said it lost $540 million for all of 2009, compared with $188.8 million in 2008.

The Las Vegas-based company said it had $1.88 billion in revenue in the fourth quarter and $4.56 billion for all of 2009, compared with $1.09 billion in the fourth quarter one year ago and $4.39 billion in 2008.

Its fourth-quarter revenue at three casinos in the Chinese gambling enclave was $952.8 million, compared with just $263.7 million from its Las Vegas operations. Sands said it had an operating loss of $15.7 million at its Venetian Las Vegas and Palazzo Las Vegas casino-resorts.

Sands owns the Venetian Macao, Sands Macao and Four Seasons Hotel Macao and Plaza Casino in Macau and and the Venetian and Palazzo casino resorts in Las Vegas.

Company executives said operators in Las Vegas have been giving discounted room rates and more complimentary hotel rooms, but Sands wants to keep its rates higher. Adelson said the key to improving results in Las Vegas is continuing to do well with group travelers as the moribund convention business recovers.

“Our convention-based business model remains compelling and we remain confident that our group business strategy together with our reduced cost base will enable us to perform well in Las Vegas in the years ahead, particularly in comparison with our competitors,” he said.

Company officials said its Marina Bay Sands resort in Singapore would open in late April. Adelson told investors in a conference call that an opening date will be announced next week.

Sands said it spent $42.1 million on preopening expenses in the fourth quarter, primarily on the Singapore resort. It reported $154.5 million in depreciation and amortization expenses for the quarter.

Sands has struggled with debt that stood at $11.03 billion as of Dec. 31, but raised $2.5 billion during the fourth quarter with an initial public offering on the Hong Kong Stock Exchange and now has $4.96 billion in cash.