This summary is based on the second quarter fiscal 2008 earnings call conducted by Las Vegas Sands Corp. (LVS) on July 30, 2008.
Management:
Chairman: Sheldon Adelson
President and COO: Bill Weidner
EVP: Brad Stone
SVP: Scott Henry
President, The Venetian and The Palazzo: Robert G. Goldstein
VP, IR: Dan Briggs
Key Investor Issues:
- Q2 net revenues increased from $613 million in the year ago to $1.11 billion.
- The Q2 loss per share of 2 cents represents a dip from EPS of 10 cents in Q2 of 2007.
- Half year net revenues were $2.19 billion versus $1.24 billion for the same period in 2007.
Second-Quarter Financial Highlights:
The consolidated adjusted property EBITDAR was $278.9 million during the quarter.
- This represents an increase of 44.1% versus $199.8 million in the year-ago quarter.
- On a GAAP basis, operating income was $73.3 million compared with $86.2 million in the second quarter of 2007.
- The decrease in operating income of $13.1 million reflects an increase in revenue offset by operating expenses, including depreciation and amortization related to the openings of The Venetian Macao in Macao and The Palazzo in Las Vegas, and an increase in corporate expense as the company expands the infrastructure to execute global growth plans.
The adjusted net income was $30.9 million, or adjusted EPS of 9 cents.
- This compares with $81.9 million, or adjusted EPS of 23 cents in Q2 of 2007.
- The adjusted net income excludes loss on disposal of assets, pre-opening expense, development expense and loss on early retirement of debt.
- The decrease in adjusted net income reflects the decline in operating income as well as increased net interest expense.
- On a GAAP basis, net loss in the second quarter of 2008 was $8.8 million compared with net income of $34.4 million in Q2 of 2007.
- The decrease in GAAP net income of $43.2 million reflects decrease in operating income mentioned above as well as increased net interest expense.
The adjusted property EBITDAR for the company operations rose 28.1% to $106.6 million during the quarter.
- This compares with $83.2 million in the second quarter of 2007.
- On a GAAP basis, operating income for the company operations decreased 26.2% to $42.1 million versus $57 million in the 2007 period.
- The rise in adjusted property EBITDAR reflects the opening of The Palazzo.
- The decrease in operating income reflects the increase in depreciation and amortization expense versus the year ago quarter. This was directly related to the opening of The Palazzo.
The Las Vegas operations’ table games drop was $408.2 million in the current quarter compared with $281 million during the second quarter of 2007.
- This represents an increase of 45.3%.
- The slot machine handle (volume) increased 62.8% to $916.1 million in Q2 of 2008. This compares with $562.8 million during the second quarter of 2007.
- The increases in table games drop and slot handle were the result of the expansion of gaming capacity due to the opening of The Palazzo.
- Table games win percentage was 20.5% in the second quarter of 2008 versus 20.1% in the second quarter of 2007.
- The management had forecasted a range of 20% to 22%.
- Slot win percentage was 5.5% versus 6.1% in Q2 of 2007.
- The Casino revenues were $126.5 million during the quarter compared with $85.4 million in the last year period.
The company operations’ hotel revenues increased 52.6% to $142.4 million versus $93.3 million in the second quarter of 2007.
- The increase in hotel revenues was principally due to the opening of The Palazzo.
The Venetian Las Vegas’ average daily rate (ADR) was $245 versus $266 in Q2 of 2007.
- The Venetian’s occupancy of available guestrooms decreased to 90.6% during the quarter, a decrease from 100.9% during the prior year period.
- This decrease was due to the choice to spread a portion of The Venetian’s booked business over the 7,100 total suite inventory of the combined Venetian and Palazzo complex.
- Revenue per available room (REVPAR) at The Venetian decreased 17.2% to $222 in the 2008 period compared with $268 in the second quarter of 2007.
- In its second quarter of operation, The Palazzo’s ADR was $243, while occupancy of available guestrooms was 92.9%, generating REVPAR of $226.
The quarterly food and beverage revenues for the Las Vegas operations increased to $68.7 million.
- This compares with $45.1 million in the 2007 period, representing an increase of 52.3%.
- The retail and other operating revenues were $45.6 million in the quarter versus $29.8 million in the second quarter of last year.
Venetian Macao Operating Results:
