SCHYY Sands China Ltd (PK)

By Katherine Sayre 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 23, 2020).

Casino magnate Sheldon Adelson's Las Vegas Sands Corp. reported a 97% decline in revenue as the global pandemic damps visitation to the gambling hubs of Las Vegas and Macau, and executives expressed little optimism about a return to business as usual.

On Wednesday, Sands posted $98 million in net revenue for the three months ended June 30, down from $3.3 billion a year earlier. The company had a net loss of $985 million for the quarter, compared with net income of $1.11 billion a year earlier.

Nevada allowed casinos throughout the state, including the Las Vegas Strip, to reopen June 4 after an unprecedented shutdown in March of the state's most important industry. Since then, Covid-19 cases have been on the rise in Nevada. Casino visitors and workers alike are required to wear masks on casino floors, which are also subject to a 50% occupancy limit.

During a conference call with Wall Street analysts to discuss the results, Sands Chief Operating Officer Robert Goldstein offered a pessimistic outlook for Las Vegas, at least in the near future. Even if casino revenue rebounds, he said, conventions and other group events have supplanted gambling as the company's economic engine -- and there is no sign that business will return this year. Even the outlook for 2021 remains uncertain, he said, depending on the development of a Covid-19 vaccine.

"In all of the years I've been here in Las Vegas, I've never felt more gloomy than I do today about what's happening in Las Vegas short term," Mr. Goldstein said. "Hope long term we will see a better day."

In essence, he said, Las Vegas Strip resorts are now running like a regional casino operator relying on nearby gamblers driving in.

Sands owns the Venetian and Palazzo casinos and the Sands Expo & Convention Center on the Strip.

Meanwhile, in the gambling enclave of Macau, monthly gross gambling revenue fell 97% in June from a year earlier, according to government data. Travel restrictions have limited the flow of gamblers into the Chinese territory.

Sands' Macau resorts offer the biggest potential upside for the company right now, depending on how long it takes for travel restrictions to be relaxed further, and the company still believes there is pent-up demand in that market, Mr. Goldstein said.

Sands China Ltd., the company's subsidiary in Macau, reported a net loss of $549 million for the quarter, compared with net income of $511 million a year earlier.

The company's Marina Bay Sands resort in Singapore reopened this month.

Sands reported a cash balance of $3.02 billion and total debt of $13.82 billion as of June 30.

Also on Wednesday, rival Wynn Resorts Ltd. said it would be furloughing an unspecified number of Las Vegas workers, thanks to the weak market there. "We now know how challenged business volumes in Las Vegas are and are staffing to the significantly reduced demand," a spokeswoman said.

Write to Katherine Sayre at katherine.sayre@wsj.com

(END) Dow Jones Newswires

July 23, 2020 02:47 ET (06:47 GMT)

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