This summary is based on the fourth quarter fiscal 2006 earnings call conducted by Las Vegas Sands Corp. (LVS: chart) on February 5, 2007.
Management:
President and Chief Operating Officer: William P. Weidner
Chairman: Sheldon Adelson
Executive Vice President: Brad Stone
Senior Vice President: Scott Henry
Chief Financial Officer: Bob Rozek
VP of Investor Relations: Dan Briggs
Key Investors Issues
- Revenue was $345.9 million, an increase of over 27% compared to the fourth quarter 2005.
- Consolidated adjusted property EBITDAR came in at $244 million, a 28% increase over the fourth quarter of 2005.
- EBITDA for The Venetian in Las Vegas was an all-time quarterly Las Vegas $134.1 million.
Fourth Quarter Highlights
In Macau, the Sands delivered strong quarter reaching record fourth quarter gaming win.
This was first full quarter after opening podium expansion. Visitation and operating metrics are continuing to reflect incremental growth, even as additional high quality capacity is added to the marketplace.
In Las Vegas, The Venetian delivered the strongest quarterly performance of any property in the history of Las Vegas.
The EBITDAR, reaching over $134 million, an increase of over 52% compared to the quarter one year ago. The property is firing on all cylinders.
Gaming capacity is now being added at significant rates and the market continues to expand in response to those increases in capacity.
The Macau market grew 44.3% and that gaming market expansion is not happening in all three segments of the market place, the VIP, the mass and slots and each of these three markets is growing at healthy double-digit rates.
The highest quality products in the marketplace, those that most effectively address the market opportunity, continue to perform against the inferior product - to out perform the inferior products.
Results at the Sands Macau directly illustrate that market dynamic. In a period when substantial amounts of high-quality and new product have been added to the marketplace, visitation numbers and gaming revenues at the Sands set all-time records for the fourth quarter. While the Sands did experience, as the company had expected, an initial decrease in market share as customers visited the new competitive products added early in the quarter, market share has since rebounded. In the month of December, the Sands recorded a table games market share of over 21%. That is higher than share was before the introduction of that new product.
Sense of Cotai development plans are based squarely on those two fundamental concepts.
The gaming product will expand as quality product is introduced and second that the highest quality products in the marketplace will not only win market share from the inferior product, but will also expand the market to customers who rarely if ever came to Macau before. This is clearly what is happening in the market today, in every segment of the marketplace, in the VIP, in the mass and in the slots market.
The company believes that this market environment is ideal for the opening, this year, of the market’s first truly integrated resort, truly mega resort, The Venetian Macau, the anchor of Cotai Strip development.
The scale of this development, the level of investment, the gaming capacity and the amenities of this huge 11-million square foot development will introduce to the market - this development introduced to the marketplace will clearly create a fundamentally new playing field for those who wish to compete in Macau and the company believes generates incremental gaming demand in the Macau marketplace.
The company believes that the non-gambling amenities that accompany a true destination mega-report, thousands of world-class all suite rooms, entertainment offerings, meeting and exhibition facilities, word-class shopping and fine dining, will create new revenue streams for the Macau market as has been the case for the Las Vegas market.
The company believes those operations who do not invest in those amenities will put themselves at a distinct competitive disadvantage compared to those operators who do. The company remains unwavering in fundamental strategy, build the heart of the Las Vegas strip, recreating its scale, nearly 50 million square feet of integrated multi-brand destination resorts, complete with massive meeting facilities, shopping malls and thousands of high end condominiums, featuring 12 premiere hotel brands with nearly 20,000 hotel rooms all interconnected by air-conditioned walkover bridges right on the doorstep of China.
