Las Vegas Sands (LVS) Q1 2016 Earnings Call Transcript

Las Vegas Sands (LVS) CEO Sheldon Adelson seeing Macau gambling market stabilizing 

“Last quarter, I commented that we are beginning to see the first signs of stabilization in our Macao operations. It is therefore very encouraging to report that this quarter, we experienced our first sequential increase in mass gaming revenues in Macao since quarter one of 2014. Our Macao portfolio-wide mass revenue per day was up 5% sequentially. And at Venetian Macao, mass table revenue per day was up 10%, which is no small feat considering the arrival of new competition.”

Even though their stock price declined during the quarter, they deliberately chose not to buy back any stock 

“We will remain opportunistic in returning excess capital via our share repurchase program. While we chose not to repurchase any stock in the quarter ended March 31, we look forward to continuing to utilize the stock repurchase program to return excess capital to shareholders and to enhance long-term shareholder returns in the future. Our industry-leading cash flows, geographic diversity and balance sheet strength enable us to continue to use recurring dividend and stock repurchase programs, while retaining ample financial flexibility to invest for future growth, and pursue new development opportunities.”

The month of march was disappointing in Macau 

“March was obviously disappointing. We had a really great January, February. March certainly softened up. Worldwide, I think Chinese tourism and consumer numbers are pretty depressing across the globe. And certainly, it was a little bit soft than we hoped in Macao. That was not the case in Singapore, but in Macao, we saw a downturn. But we feel great. Cumulatively in the quarter, our mass revenues, both our premium and the mass-mass side continued to grow.

Not interested in attracting visitors who are looking for cheap hotel rooms and are price sensitive.  They’d prefer to host tourists with bigger pocket books 

“Our focus is not to sell rooms cheaply in Hong Kong to people looking for the best deal. That’s what’s happening a lot in that market is deep discounting where you can buy a room for sub-$100 a day. Our goal and our team’s goal is to stay occupied with mostly people coming from further away, a larger shopping/gaming budget, and I think that’s going to prove to be a very big advantage for us in The Parisian and throughout the entire portfolio. We’re longer doing this, we’re better at it, so we have more experience. And again, we have the convention space as well. So we’re very focused on maximizing our retail non-gaming portfolio in Macao.”

Las Vegas Sands (LVS) CEO Sheldon Adelson reminded investors the casino business is cyclical 

“Everything is cyclical. We’ve been in Macao for 12 years now. And there have been times over the 12 years that people thought that the business is going down, and then it’s going to go up. I remember somebody saying that things are going to hell in a hand basket because the growth that year was only going to be 50% and people were projecting 70%. I mean everything is cyclical. It’s going to change. People that come from China that aren’t coming now will come again.”