Sands China has announced its financial results for the second quarter of 2024, revealing a notable increase in revenue and net income. This update highlights the company’s resilience and strategic investments in its properties despite a competitive market environment.
Financial Performance
For Q2 2024, Sands China achieved a revenue of $1.75 billion, marking an 8% increase year-on-year. The company’s net income for the quarter was reported at $246 million, up from $187 million in the same period of 2023. This represents a significant improvement in profitability and reflects the effectiveness of the company’s operational strategies.
Adjusted property EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $561 million for Q2 2024, showing a modest increase from $541 million in Q2 2023. The increase in EBITDA underscores the company’s strong operational performance and effective cost management.
Factors Affecting Earnings
Several factors influenced Sands China’s earnings during this period:
Weighted Average Borrowing Cost:
The company’s weighted average borrowing cost decreased to 5.0% from 5.4% in the previous year. This reduction in borrowing costs has likely contributed to the improved net income and overall financial performance.
Capital Expenditure:
Sands China’s capital expenditure for Q2 2024 totaled $285 million. This amount includes $131 million allocated specifically for construction, development, and maintenance activities in Macau. Key maintenance activities involved significant renovations at the Londoner Grand and Cotai Arena of Venetian Macau.
Renovation and Maintenance Projects
The ongoing renovations at Sands China’s properties are expected to enhance the company’s future earnings:
Londoner Grand Renovation:
The first phase of the Londoner Grand’s renovation, which involves the renovation of the first tower, is scheduled for completion by the end of 2024. This phase includes a temporary closure of the casino, which will be re-opened by December 2024. The second phase of the renovation, involving the second tower, is set to begin in 2025.
Cotai Arena Renovation:
The Cotai Arena at Venetian Macau is undergoing renovations and is expected to resume operations by late 2024. The completion of these renovations is anticipated to positively impact the company’s EBITDA.
Industry Outlook
Recent predictions by investment bank Citi suggest that the combined EBITDA margins for the six largest gaming concessionaires in Macau, including Sands China, are expected to reach an estimated 28% in 2024. This projection indicates a strong and resilient gaming market, which bodes well for Sands China’s future performance.
Sands China’s Q2 2024 financial results demonstrate a positive trajectory in revenue and net income, supported by a reduction in borrowing costs and strategic investments in property renovations. The completion of ongoing renovation projects is expected to further enhance the company’s earnings. The favorable industry outlook also adds to the positive prospects for Sands China in the coming quarters.