Las Vegas Sands outlines plans for Macau

By Steve Green

Monday, Nov. 2, 2009 | 9:27 a.m.

Las Vegas Sands Corp. today released detailed information on its operations in the Chinese gambling district of Macau as it seeks to raise some $2.5 billion in a public stock offering on the Hong Kong Stock Exchange.

The company said it completed its listing committee hearing with the exchange on Thursday and that the listing application for its subsidiary, Sands China Ltd., still awaits formal approval.

As part of the process, Sands posted a lengthy "Web Proof Information Pack" on the Web site of the exchange.

The information pack projects 2009 adjusted EBITDAR -- a profitability measure -- of $803 million from Las Vegas Sands' Macau operations.

Net revenue in 2008 for Las Vegas Sands in Macau was $3.053 billion and adjusted EBITDAR was $686 million, up 55.3 percent and 33.4 percent, respectively, from 2007.

Las Vegas Sands intends to use some of the funds raised -- a projected $2.5 billion according to the Associated Press and Bloomberg News -- to repay debt and resume construction of suspended Macau projects.

"We are the leading developer, owner and operator of integrated resorts and casinos in Macau as measured by EBITDA for ... 2008 and the six months ended June 30, 2009," Sands China said in its filing. "We are the largest operator of integrated resorts in Macau, which contain not only gaming areas but also meeting space, convention and exhibition halls, retail and dining areas and entertainment venues. We believe that our integrated resorts are unique to Macau and are what differentiate us from our competitors."

The company's operating assets in Macau are the Venetian Macao, the Sands Macao and the Plaza, a resort with a Four Seasons Hotel and the Plaza Casino.

In the third quarter, revenue at the Venetian Macao fell 5.5 percent to $493.6 million, but rose 13 percent to $280.8 million at Sands Macao and was up 37.8 percent to $67.1 million at the Four Seasons Macao and Plaza Casino.

Las Vegas Sands stock traded this morning at $14.45 -- about even from Thursday, when the company reported a quarterly loss of $123 million as revenue rose 3.2 percent to $1.14 billion.

The stock opened higher Friday but then fell as analysts weighed in on the quarterly results.

Sands in its earnings conference call offered an optimistic assessment for its Venetian and Palazzo resort complex in Las Vegas even as the city struggles during the recession and faces the challenge of filling more hotel rooms as MGM Mirage's CityCenter and other projects open.

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Sands China's definition of adjusted EBITDAR is "profit before interest, income taxes, depreciation and amortization (net of amortization of show production costs), pre-opening expense, development expense, net foreign exchange losses (gains), loss on disposal of property and equipment, corporate expense, land lease expense, share-based compensation and fair value losses (gains) on financial assets at fair value through profit or loss."