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Marina Bay Sands earnings for Q3 slump on weaker VIP segment

A SLUMP in VIP play at Marina Bay Sands has dragged third-quarter ebitda (earnings before interest, tax, depreciation and amortisation) down 5.2 per cent to US$419 million from the same period a year earlier.

Lower casino rolling chip volume – which typically refers to VIP play – tumbled 24.9 per cent from the same period a year earlier to US$7.1 billion for the three months ended Sept 30.

Total casino revenue slipped 8.7 per cent to US$532 million, as a 2 per cent increase in the mass win‐per‐day for non-rolling tables and slots failed to make up for the drop in VIP visitors.

The slower casino business offset growth in Marina Bay Sands' hotel and non-gaming businesses.

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Net revenue fell 2.9 per cent to US$766 million, although room revenue rose 12.8 per cent to US$106 million, while food and beverage sales rose 15.2 per cent to US$53 million. Mall revenue rose 4.8 per cent to US$44 million.

Robert Goldstein, president and chief operating officer of Las Vegas Sands Corp, which runs Marina Bay Sands, said in an earnings call on Wednesday night: "The outlier is the VIP business... and the team there has effectively grown the margins by double from a 15, 16 per cent business to a 30 per cent-plus business. The struggle there is growing the top line. And so, as you know, we've struggled there, and we're going to keep struggling. It's not a growth business in terms of the rolling business."

Sheldon Adelson, chairman and chief executive, said: “We've continued to generate stable cash flow in Marina Bay Sands... both our hotel and our overall non-gaming revenues increased by more than 12 per cent over the prior year."

Retail tenant sales per square foot at The Shoppes at Marina Bay Sands has jumped 22.2 per cent in the last 12 months, Mr Adelson added. 

Hotel occupancy was 97.5 per cent for the third quarter, up from 96.6 per cent for the third quarter last year. The average daily rate was US$466, up 4.3 per cent, while revenue per available room rose 5.3 per cent to US$455.

As a group, Las Vegas Sands Corp's third-quarter results missed both revenue and earnings forecasts, though the casino giant announced that it would hike dividends for the 2019 calendar year.

Las Vegas Sands' third-quarter ebita rose 6 per cent to US$1.28 billion, lifted by its stronger Macau business. Net income rose 2.2 per cent to US$699 million.