- In the property’s third quarter of operation, Rolling Chip volume at The Venetian Macao was $9.89 billion.
- The Non-Rolling Chip table games drop was $851.6 million.
- Casino revenues for the quarter were $415.6 million.
- The Non-Rolling Chip table games win percentage was 20.3% in Q2 of 2008 while Rolling Chip table games win percentage was 30.1%.
- These results compare with the expected Non-Rolling Chip table games win percentage of 18% to 20% and Rolling Chip table games win percentage of 3%.
- Slot handle (volume) for the second quarter of 2008 was $447 million.
- Slot win percentage was 8.1%.
- Hotel revenues during the quarter were $46.5 million.
- The Venetian Macao’s ADR was $225 while the occupancy per available guestrooms was 80.2%, generating REVPAR of $180.
- The retail and other operating revenues were $36.8 million.
- Food and beverage revenues were $15.4 million.
- The adjusted property EBITDAR for The Venetian Macao was $140.2 million for the quarter.
- On a GAAP, Q2 operating income for The Venetian Macao was $83.6 million.
Sands Macao Operating Results:
- Q2 Rolling Chip volume decreased 14.9% to $6.18 billion compared with $7.26 billion in the second quarter of 2007.
- Non-Rolling Chip table games drop was $657.7 million during the quarter versus $900.7 million in the year ago quarter.
- The Sands’ Rolling Chip table games win percentage was 2.82% while Non-Rolling Chip table games win percentage was 19.5% for the quarter.
- The results compare to the expected Rolling Chip table games win percentage of 3% and Non-Rolling Chip table games win percentage of 18% to 20%.
- The Sands’ slot handle (volume) for the quarter was $260.5 million, representing a decrease of 17.9% versus $317.4 million in Q2 of 2007.
- Q2 casino revenues decreased 29.8% to $262.2 million versus $373.5 million in the 2007 period.
- The decreased revenues reflected lower Rolling Chip volume, a lower Rolling Chip table games win percentage (2.82% in current quarter compared with 3.44% in the 2007 quarter), and lower Non-Rolling Chip table games drop.
- The Sands Macao adjusted property EBITDAR decreased to $54.1 million versus $116.6 million in the second quarter of 2007.
- The decline was mainly due to the drop in casino revenues.
- The operating income on a GAAP basis for the Sands Macao dipped to $40.2 million for the quarter versus $104.7 million in the last year’s second quarter.
- The introduction of high quality competitive product, including The Venetian Macao on the Cotail Strip, has been significant in the last year but will slow going forward, especially on the Macao peninsula.
- Amidst strong competition, the Sands continues to generate strong cash flow and returns.
- Looking forward, the management expects to continue to reduce the cost structure at the Sands Macao.
The pre-opening expenses related largely to the Four Seasons Macao, Marina Bay Sands in Singapore, Sands Bethlehem and other resorts on the Cotai Strip.
- These expenses totaled $38.1 million during the quarter versus $40.3 million in the same period last year.
- The development expenses related to efforts in the People’s Republic of China, the wider Asian region, Europe, the U.S. and other areas.
- These expenses were $4.5 million for the quarter compared with $1.3 million in Q2 of 2007.
- The quarterly depreciation and amortization expense was $119.1 million versus $35.7 million in the year ago quarter.
- The increase was principally caused by the openings of The Venetian and The Palazzo.
- Interest expense, net of amounts capitalized, was $88.5 million for the quarter.
- This compares with $54.4 million during the second quarter of 2007.
- The increase was a result of increased borrowings to support the company’s growth pipeline and current and future development.
- The increase also included various borrowings entered into by the company.
- The capitalized interest was $31.6 million for the quarter versus $58 million in Q2 of 2007.
- The second quarter interest income was $3.1 million compared with $21.4 million in the second quarter of 2007.
- The corporate expense was $33.6 million for the quarter versus $24.7 million in Q2 of 2007.
- The management reported stock-based compensation expense of $14 million for the quarter. This compares with $8.6 million in the second quarter of 2007.
- Other expense was $3.7 million.
- This compares with $2.3 million for the comparable period in 2007.
- Other expense is largely composed of foreign currency losses.
The company’s projected effective tax rate for the full year 2008 is about -1.5%.
- This is lower than the U.S. federal statutory rate of 35%.
- This was because of a zero percent effective tax rate on the Macao gaming income and a projected taxable loss in the U.S. for 2008.
Balance Sheet Position:
- The unrestricted cash balances as of June 30, 2008 were $801.8 million while restricted cash balances were $173.1 million.
- Of the restricted cash balances, $78.5 million is restricted for Macao-related construction and $71.9 million is restricted for construction of Marina Bay Sands in Singapore.
- As of June 30, 2008, total debt outstanding, including the current portion, was $8.92 billion.
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