Las Vegas Sands Q3 2021 Earnings Call Transcript

Quartr
Provided by Quartr
October 20, 2021

There are 15 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to Las Vegas Sands Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Thank you. I would now like to hand the conference over to your first speaker today, Mr.

Operator

Dan Briggs. Sir, the floor is yours.

Speaker 1

Thank you, operator. Joining me on the call today are Rob Goldstein, our Chairman and Chief Executive Officer and Patrick Dumont, our President and Chief Operating Officer. Also joining us on the call are Doctor. Wilford Wong, President of Sands China and Grant Chum, Chief Operating Officer of Sands China. Before I turn the call over to Rob, please let me remind you that today's conference call will contain forward looking statements that we are making under the Safe Harbor provision of federal securities laws.

Speaker 1

The company's actual results could differ materially from the anticipated results in those forward looking statements. In addition, we may discuss non GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release. Please note that we have posted supplementary earnings slides on our Investor Relations website. We may refer to those slides during the Q and A portion of the call.

Speaker 1

Finally, for those who would like to participate in the Q and A session, we ask that you please respect our request to limit yourself to one question and one follow-up, So we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded. With that, let me please turn the call over to Rob.

Speaker 2

Thanks, Dan. Good afternoon and good morning to our colleagues in Asia and thank you for joining our call today. I'll provide some brief comments, then we'll go to the Q and A. Our results continue to reflect the pandemic's impact, heightened restrictions directly impacted our results in both Macau and Singapore this quarter. We did generate positive EBITDA for the quarter in both markets and remain confident in the eventual recovery in both Macau and Singapore.

Speaker 2

Singapore Gaming operations have closed for a portion of the quarter and enhanced restrictions were in place throughout the remainder of the quarter. The good news in Singapore is the travel quarters are being established with a number of source markets, which hopefully will contribute to the stronger recovery over time. Our considerable investments in Macao continue to take shape. As the market recovers, we believe the Four Seasons and London will present Our growth opportunities in the future. The spending at Cowell has proven both resilient at the premium mass level from both the gaming and retail You see on Page 29, 30 year debt.

Speaker 2

We have great optimism in our ability to perform to a pre pandemic level once Our company is divided in 3 areas. Most importantly, the Asia portfolio in Macao and Singapore. We remain confident we will return to a strong positive cash flow in both Macau and Singapore in the future as restrictions are eased and travel and tourism recover. The sale of our Las Vegas assets create liquidity and optionality as we pursue large scale land based destination resorts in both U. S.

Speaker 2

And Asia. We will continue to build out our digital presence and we're exploring multiple opportunities will face you at the appropriate time in the future. So thanks for your time again today. Let's go to the questions. Dan?

Speaker 1

Operator, we're ready to go.

Operator

Thank you. Your first question is coming from the line of Carlo Santarelli from Deutsche Bank. Your line is open.

Speaker 3

Hey, everybody. I hope everyone's well. Rob, obviously not going to spend a lot of time discussing the results as we all know the numerous things impacting results right now. But When you think about kind of the progress as it pertains to Macau and what you're kind of hearing around potential easing of Visa stuff, whether it's on a province by province basis or whatever the latest is You could kind of share would be appreciated.

Speaker 2

Sure. We woke up 2 guys, Neil and I saw them speak to it. The grant to Wilford, Why don't you take that since you're on the ground and living and breathing these issues every day?

Speaker 4

Yes. Let me give that a try. Thanks, Rob. Yes. On the visas, I think the main point is the visa channels for the individual business scheme remains open.

Speaker 4

I think if you look at the quarter, in the 3rd quarter, what really impacted results during the quarter Month by month is really the conditions on the ground in terms of domestic COVID cases. So you will see that in July, we had at one point for about 3 weeks in July, we had a pretty significant Recovery in the visitation and also room occupancy. And we were starting to get a good Momentum for the summer after the issues we had in the Guangdong outbreak in June. And then as we moved into late July early August, we had more local cases, Starting with the Nanjing Airport outbreak and eventually in early August, we did have 4 local cases. So that obviously curtailed the traffic immediately.

Speaker 4

And then as we moved into September, again, We were recovering well, especially in the 2nd 3rd week of September And we were building up ready for the October Golden Week again. And unfortunately, We did have some local cases towards the last week of September, which again Reduce the traffic immediately as it led to additional restrictions around the border. So That really explains how the traffic flow evolved during the quarter.

Speaker 3

Great. Thank you. That's helpful. And then just as a quick follow-up. Rob, you guys did disclose and I think this is different From how you've disclosed historically around capital expenditures in the period, the one line in there was $24,000,000 of Corporate and other.

Speaker 3

Does that what exactly does that pertain to? And does that have anything to do with the comments that you made on kind of the digital piece of the business?

Speaker 2

Sure. Pat, why don't you take that?

Speaker 5

Sure. I think there's a bunch of stuff in there. Some of the stuff related to digital and Some of it relates to CapEx associated with moving.

Speaker 3

Got it. And could you kind of just update your latest thoughts The learnings of the last couple of months quarter as it pertains to kind of the digital initiative to any degree, Patrick?

Speaker 5

Yes, sure. Happy to do it. I think for us, we take a very long term approach. We mentioned it last quarter. I think this is something that's going to invest over quarters years.

Speaker 5

We're really investing for the future. I think for us, we're looking to be sort of mindful in the way we deploy capital. We've always had We have investing in things that we think provide a very high level of returns in the future, and that's how we're thinking about it today. We think there's a great opportunity in digital in a variety of different areas. You see some of the valuations that the market is giving to certain areas today.

Speaker 5

We think it's very compelling, especially for the long term. So, right now, we're just sort of Moving along slowly and when we have more things to report, we will, as Rob said in his opening remarks, but we're very confident. We have capital to play against it. We're excited about the future when we have more things to talk about, we certainly will. But right now, it's very early stages.

Speaker 3

Understood. Thank you, guys.

Speaker 2

Thank you. Thank you.

Operator

Your next question is from the line of Stephen Grambling from Goldman Sachs. Your line is open.

Speaker 6

Hey, thank you. Maybe changing gears to look at Singapore. It looks like that market was also obviously impacting Quarter VIP particularly soft. If we look out further once restrictions ease, I guess how do you think about the potential EBITDA potential of that asset If VIP in Macau remains pressured, in other words, what kind of overlap do you typically see in Singapore from the Chinese traveler and could that be impacted if VIP is kind of permanently restricted?

Speaker 2

Sure. Yes, first, I think the fascinating part to me is we operate in 3 markets currently. And Las Vegas is the blueprint, I think the recovery of Asia was said about a year ago, I know we're coming to work and someone told me here in Las Vegas, we wouldn't see normal Returns here to revenues till 2024, 2025. So here we are in the fall of 2021 and the market is low and wide open. And what's the path?

Speaker 2

The path is pent up demand, vaccinations and doors get open. And I think Las Vegas will be the blueprint for Asia. That's the path. So vaccinations in Asia are booming. If you can look at what's happening in Singapore, Malaysia, Japan, China, Korea, it's all above Percentage wise, what's happened in the U.

Speaker 2

S? So first, we have extremely strong vaccination rates in Asia surpassing the U. S. Number 2, I think you've got obviously the government that once opened the doors in Singapore as evidenced by their actions, they wanted just that. I think you'll see a big turn in 2022.

Speaker 2

The recovery will begin in 2022. When do we get back to 1.7 and maybe beyond that EBITDA? I don't know the exact date, I can't tell you. I can tell you this, it's going to be a lot better in 2022. The government continues their path, which has shown a lot of leadership, Our thoughtfulness vaccination rates, I think, are actually approaching 80 plus percent.

Speaker 2

The market over there feels it's ready to come back In 2022, as the government opens its travel lanes and we look at again, the demand issues here in Las Vegas have been, I think very instructive. It's great to walk through here and see the numbers that's kicking out through the entire city. Why wouldn't that happen in Asia? Singapore has been a Hugely important market to us. Your point about Macao versus the Chinese market, obviously, part of our business is dependent upon Access to Chinese market, but it's not dependent.

Speaker 2

You probably can still make a lot of money, maybe as much as $1,500,000,000 without Chinese input. So if Korea opens up and Singapore opens up, Malaysia opens up and Korea and Japan, Those markets are very, very fat and happy for us. And I believe we'll see this are opening up throughout 2022. That's the path. It's a vaccination rate, which is soaring.

Speaker 2

It's open travel lanes. It's open the doors up and then watching what's happened in Vegas, happened in Singapore. And I feel I don't want to identify a month or a quarter, Well, I think you're going to see a nice turn in 'twenty two and then the same lap in Macau when the government decides to open those doors up. So I know there's people, I read these people who say it's 25 to McAlpin's and 27, but the truth is Vegas it took about 30 minutes. Once we open doors up, It just recovered.

Speaker 2

And as a gaming base recovery, it's not a convention banquet base recovery, that's yet to come. So I think the future in Vegas remains, as you always said, very bright and there's no reason why it can't be emulated in both Singapore and Macau As vaccination rates take off and governments get more confident and travel lanes reopen. So we're highly confident it's going to happen in Singapore in 2022. To what degree? I don't predict, but it's just question time for MBS goes right back where it was pre COVID.

Speaker 2

It's just inevitable. So we're very confident.

Speaker 6

That's helpful. And perhaps as a follow-up going back To Macau, I would love to just if you could provide any additional color on the consultation process and what are the kind of the key points of clarification that you are watching for, as you think about how to strategically position the business? Thanks.

Speaker 2

I've been involved in one of my colleagues in Macao for over 2 decades. And we've been seeing and have everything in Macao. I mean, we've been through everything. And Starting 20 years ago, when people say, oh, you can't do business in Macau and then Cotai wouldn't be successful. And then we have the incredibly Crippling crisis in 'eight and 'nine, we had smoking issues.

Speaker 2

It always worked out. And we're very proud of what we've done in Macao over the years. I think our activities, our investments speak for themselves. I have faith in the process. They've always treated us fairly and we've responded with the largest investment in any gaming market So we believe we remain believers.

Speaker 2

We wait for the government's advice and direction. We've submitted our responses. But looking at our history of success, I believe we will be instructed for the future of our business in Macao. And so no more comment beyond that. I think It's clear to say that we have a lot of leads in this market.

Speaker 6

Fair enough. Thanks so much.

Speaker 2

Thank you.

Operator

Your next question is from the line of Joe Greff from JPMorgan. Your line is open.

Speaker 7

Hello, everybody. Rob and Dan, on Macau's recovery and the potential for more meaningful increased travel and mobility Mainland China and Macau, do you get the impression, whether it's from conversations with the government or otherwise, That this is more likely after the Olympics in Beijing in February?

Speaker 2

I'll defer to the fellows in the ground, but I don't think we've heard These points of the Golden Week and it's going to happen when the Olympics are over, I don't think we know. And I think it'd be silly for us to predict. Joe, I don't think we can We want to give you confidence that we have great insights when the doors will reopen, but we just know they will at some point. I think 2022 will be a turn year, But I don't want to get into the game of saying it's to happen this day. I think we said in previous calls, we don't know when, we just know when it does happen.

Speaker 2

It's going to be very powerful. It's going to mimic Las Vegas. I mean, anybody doesn't see that hasn't spent time in Macao. It's going to be quite a storm of activity over there. But I don't want to pin the Olympics or Golden Week or because we obviously we've been wrong, but those who predicted have fallen on the sword, There's no reason to.

Speaker 2

Grant, Wilfred, do you have a different approach to this? Speak up. Yes.

Speaker 4

So we agree.

Speaker 1

Sorry, Grant. Sorry, go

Speaker 4

ahead. No, I was just going to say, I mean, we see Underlying demand continues to be very strong when the opportunity arises. Now the opportunity has Maybe has been relatively brief, 1 month here, a few weeks there, but we can definitely see the underlying demand Actually across all the different segments as very strong. And I think Rob referenced the pent up demand that we've seen In Las Vegas coming through. And I think it's not going to be dissimilar in Macau, but agree with Rob that We can't be really drawn into predicting timing, but we definitely see the evidence on the pent up demand for sure.

Speaker 7

Great. And

Speaker 8

then And I think that the China will open up to the world When they feel confident that they can control any community outbreak situations And that depends a lot on the vaccination rate, which at this stage stands at about 80% and the availability of medicinal cure. They are now testing with all kinds of Cure methods including Chinese herbal methods and there's a lot of research going into it. So we're quite hopeful that very soon with they are vaccinating at about 1,300,000, 1,400,000 people a day. So if they continue like this in another 200 days, It will be another 10% of the population. So I think as China's vaccination rate goes up, the government's confidence Increases and we are hopeful that Macau as part of China adopting similar policies We'll benefit from the opening up.

Speaker 1

Great. Thank

Speaker 7

you. Patrick, on the Investments on the digital side, can you talk about how you envision maybe the size of those investments over the next couple of years? Are we talking about relatively small, More modest investments or could we see investments in 100 of 1,000,000 or $1,000,000,000 range depending on what's available and what you like?

Speaker 5

So it's something we talk about a lot internally. I think some of it's going to be related to the value of the opportunity that we see. I think sort of our thoughts right now is that we're really thinking earlier stage or mid stage. But again, it would fit into a larger strategy and And that's kind of how we'll think about being effective for the long term and how we think we'll create long term value. I don't know that we'll necessarily look at something that's transformational right away.

Speaker 5

That's something that we may consider in the future depending on where things go and what market opportunity we see. But I think the good news is we've got plenty of firepower. We've got a strong management team and Expertise in the industry and we think we can be really helpful to growing technology. So from our standpoint, we're going to be opportunistic and we'll see how it goes. But in the beginning, we're going to start And sort of build from there.

Speaker 1

Great. Thank you.

Operator

Your next question is from the line of Robin Farley from UBS. Your line is open.

Speaker 9

Great. Thanks. I wanted to ask about one of the proposals in the new legislation Is that it would require government approval for dividends. And if that were enacted, I realize it's just in the discussion stages now. But if that were an accident to law, would you think twice about investing if you If then there would be a chance that you wouldn't be approved to get a return on that investment.

Speaker 9

In other words, how much of a concern would that be for you? Thanks.

Speaker 2

Oscar, you want to take that? I'm sorry,

Speaker 5

Grant. Yes, I think it I think from our standpoint, I think we're obviously very much focused Building on our past and as Rob mentioned, I think we have a great track record of investing in Macau in scale and non gaming amenities. And I think from our standpoint, we have confidence that what ultimately will result from this process Will be a good path forward. And so we're very confident. We're eagerly waiting instructions on how to proceed.

Speaker 5

But in our mind, Macau is the best market in the world. We continue to invest. We're very excited about the long term in Macau and we'll wait and see how things go. But from our standpoint, we're very confident about the future.

Speaker 2

Robin, one thing I think we try to reference is after 2 decades of being there, we've never found the government to be Not thoughtful. They're very thoughtful. And they're going to take these issues and make it reasonable for all of us. We're not that concerned. I mean, I saw initially the response was Things like that, big concern.

Speaker 2

We don't have those concerns. And yes, we're eager to reinvest in Macao. And we're assuming that the process will be They are equal and we're also assuming that they want us to invest as well. The government there wants to see growth in Macao. So we're not that concerned about that issue at all.

Speaker 9

Okay. That's helpful. Thank you. Maybe just a quick follow-up. Just in terms of Timing or potential extension of your existing concession, is there a point at which You feel like the indication is that it's going to be extended for at least another 12 months.

Speaker 9

I mean, just given The timing already seems would be seems very challenging to do anything before June of 'twenty two, Given the inability to travel into the country, is that safe to assume that at this point, It's not something you would expect to come up for bid before June. Thanks.

Speaker 2

I don't think we're going to we're not going to voice an opinion because we just Again, we remain confident the process will work out. Again, we have 2 decades of history with this government And it's been a very good 2 decades. This company built a great business base. We've had like every business, you have stops and starts and good days and bad days. But In the 2 decades since we started new business from Macau, we've always found the government very reasonable, very thoughtful And very fair.

Speaker 2

And we're not concerned whether they make that decision next month, the month after or make it in June. I don't know when they're going to make that decision. I'll let them make that decision and tell us. We'll respond accordingly, but we have no trepidation or great fear that could be an issue with this. We knew this was coming.

Speaker 2

I mean, it is a leasehold. We knew this day was coming and we're prepared for it and we're all prepared to wait until the government tells us how they want to proceed and we'll respect for that process.

Speaker 9

Okay, great. Thank you very much.

Speaker 2

Thank you.

Operator

Your next question is from the line of Shaun Kelley from Bank of America. Your line is

Speaker 10

Hi, good morning and afternoon everyone. Just to maybe follow-up on this, The whole licensing process. I mean, I think one thing we've all thought about is the requirement or the idea that there are probably incremental capital that would need to be invested either in Macau, theoretically in non gaming amenities, which you know well or in somewhere in sort of Greater Mainland China. Just kind of wanted to ask about that last point. Any thoughts on your desire, your ability to invest directly in Mainland China?

Speaker 10

Is that something you'd be Prepared to do and sort of how would you kind of underwrite returns or think about underwriting those given some of your return focus, if that was the ask?

Speaker 2

I'm going to defer to Patrick, but I'm going to preempt that by saying we again, we have the ability to invest That's clear based on our balance sheet. We have the appetite to invest. We have a track record that obviously we've invested 15,000,000,000 We invested a few $1,000,000,000 right before the pandemic hit, which people thought, oh, gee, you want to clarity the license, we did it. So we remain willing and eager to invest in Macao and perhaps other parts of Macao and just waiting for that day to happen. Patrick, you want to jump in?

Speaker 5

Sure. Thanks, Rob. We're very happy and very proud of Sheldon's long term vision for Macau And for our company's investments, we're very proud of what Sheldon and the company and the team has accomplished over many years there. The amount of investment, the high quality of Tourism assets that we've created, the tourism drivers, the non gaming diversification and really to be fair, a lot of the tourism innovation that we brought to Macau have all been things that Complimentary and follow through with the original goal of the first concession. And so we're very proud about that and we're very confident about the future and our ability to invest in order to support These long term goals of the government and for the company.

Speaker 5

And so I think as we look to potential things that we may have to do in terms of future investment, we welcome the opportunity. We would love to invest more. We're very eager to deploy capital into these markets. We think they're very high quality and We really believe in the future. So there's just been a lot of commentary around things that may happen to occur or may have to occur.

Speaker 5

I don't think anyone really knows. I think the only thing that we're very confident about is our ability to invest to innovate from the tourism side and to drive Really the support of the initiatives that have been asked of us. So from that standpoint, we're ready to do it. But until we get clear direction, there's not really much more we can say.

Speaker 10

Great. And maybe just as a follow-up, sticking with the investment theme, probably for you, Patrick, but just thinking about The like the same question for Singapore. Obviously, there you have a little bit more of a developed path on dollars that have been allocated and when you want to get going. Can you just give us the latest on when you think you'd actually be moving on some of the investment you guys have Committed to make there and building out the additional hotel tower and expansion?

Speaker 5

Sure. As we've said before, I think we're very excited to do It represents a tremendous opportunity to support Singapore's goals to deploy a significant amount of capital in the most privileged market in the world, which is really one of the great cities in the world. Singapore is growing. It was growing tremendously before the pandemic, And they've really been leaders in their public health initiatives to support their population during the pandemic. So we're very proud to be there.

Speaker 5

I think we would love to get started as soon as possible. But right now, they're dealing with a lot of things that have a higher priority. So we're waiting patiently. We have a long term partnership with the government and we're looking forward to working through We'll open remaining items so that we can begin. But our plan is to begin and we're very excited about it.

Speaker 5

So the question is when and I think that's going to be dictated by Necessary public health responses around timing and opening.

Speaker 10

Thank you very much.

Operator

Your next question is from Ben Chaikin from Credit Suisse. Your line is open.

Speaker 11

Hey, how's it going? There's been lots of conversation understandably about investing in digital and future investments that may be required in Singapore And Macau, but at the same time, you spoke about pent up demand in Macau and Singapore, which Seems to make a share buyback at these levels, potentially a more compelling ROI. I guess, how do you balance the optionality of those different

Speaker 5

Options, I guess, yes. So we think about this A lot. We spent a lot of time on it as a management team. We run a lot of sensitivities and scenarios around potential returns. And it's interesting, we have a lot of opportunity as a company.

Speaker 5

We're really excited about it. And I think our highest and best use of capital And to create the best shareholder returns really is to develop new projects from the ground up. That's how we've built the company. That's how we've always created the return profile that has made our equity very compelling. And so from our standpoint, that's our focus.

Speaker 5

Rob and the rest of the team spend a lot of time looking at new development opportunities in many different jurisdictions. And so we're focused on deploying capital into those jurisdictions to grow the business. At the same time, we recognize there's opportunity in the equity. And in the past, we've always returned excess capital through share repurchases. And so that's something that we'll look to do in the future.

Speaker 5

But at this point, I think we're evaluating a lot of opportunities for real growth. And so from that standpoint, we're very excited, But we'll always look at the return potential of Via Equity. Do we believe the equity is at a compelling level? Absolutely. But at the same time, we also like to believe that we have some real So to your point, it is a balance.

Speaker 5

But we look at it and we're trying to allocate capital in the best way that we can.

Speaker 3

Thanks.

Speaker 2

Thank you.

Operator

Your next question is from the line of Dan Politzer from Wells Fargo. Your line is open.

Speaker 12

Hey, everyone. Good afternoon. Thanks for taking my questions. So on Singapore, how do you think about margins for this I think there's a higher tax rate that goes into effect and potentially impact some construction disruption and possibly some of the costs you were able to optimize over the past 18 months. So going forward over the next couple of years, how do you think about that given the For pent up demand to come back in 2022?

Speaker 2

Well, first of all, I look at what's happened again, it's instructive look at Las Vegas. The so called 4 year recovery took again about less than a year. I think Singapore is in the right of Las Vegas in terms of the pre COVID recovery being Stronger, which means stronger margins for us and bigger growth. I think this market in Singapore is We've been very resilient in the past, especially when the government's comp open travel lanes, open the doors up. I think margins will be just fine.

Speaker 2

We didn't by the way, we didn't furlough people or lay off Lots of people didn't squeeze people out the door. We stood by our employees. And I think we didn't necessarily maximize, we could have. We decided not Do that. And I guess to our credit, but on the other hand, I think our business there will kind of reoccur back to pre COVID levels and probably beyond pre COVID.

Speaker 2

And again, if Vegas is destructive and I believe it is, the demand is going to be extraordinary in Asia. The lockdown here in Las Vegas was much shorter And lockdown in Asia, yet the gambling proclivity for a lot of Asian countries is stronger than Las Vegas. So anybody who thinks Singapore is not going to come back With a vengeance, I think he's mistaken the same in Macao. And of course, those revenues will drive our margins. So I have no fear that we're going to return Pre filled margins and pre filled revenues exceed both.

Speaker 2

In fact, I'm really bullish on Singapore. It will be the 1st and the best place open next year For the gamer or for the tourist or for the leisure traveler, there's going to be exceptional plans to revisit. You see where the government's going. They indicated they were anxious to get open. Their vaccination rates are soaring.

Speaker 2

The travel lanes are being established. The neighborhood is getting better, Malaysia, Korea, And Indonesia is still lagging, but coming on. So I think it's just question time, 2022 is the turn year. So we see margins and revenues and EBITDA is being much more back to normal than the last 24 months.

Speaker 12

Got it. Thanks. And then just one more on Macau. I mean, when Macau does eventually recover, how do you think about your share of mass and spot GGR evolving, given the opening of the Londoner, which we didn't have back in 2019. And also, I know it's targeted different customer, but how do you anticipate any impact From Las Vegas Sands on your properties and if so, if there is an impact, which ones?

Speaker 2

Yes. Mr. Chum, are you still late?

Speaker 4

Yes, Rob. I think history of Macau shows every time we have large scale, High quality product coming in on Cotai, it helps the market. And I think when the demand comes back, it's going to be to the market's benefit and to the whole industry's benefit That we've got good new product that customers can patronize and that applies To Lisboa Palace that applies to what some of our other competitors will be will have opened by then. And obviously, we think 1st and foremost is going to apply to what we've completed in Grand Suisse at Four Seasons And also the London and Macau. So we're very excited and confident that when the demand returns, All these new projects, but I would say especially our projects It's going to be a growth driver for the industry and by implication, we hope that We will achieve good market share.

Speaker 4

But I think it's much more about, as the history and to that case have shown, Growing the overall pie, and I think in terms of segments, again, I wouldn't hesitate to say It's going to be positive across a very broad base of segmentation, the mass, the premium mass and so forth.

Speaker 12

Got it. Thanks so much guys.

Speaker 2

Thank you.

Operator

Your next question is from the line of David Katz from Jefferies. Your line is open.

Speaker 2

Hi, David.

Operator

Okay. We'll go to the next question. It's from the line of Steve Wieczynski from Stifel. Your line is open.

Speaker 13

Hey, guys. Good afternoon. Just one question here for me. Good afternoon, Rob. Just one question for me.

Speaker 13

And Rob, I know you're probably tired of answering a bunch of Yoursake questions about the renewal process in this one. It's probably going to be a bit more direct. But I guess the simple question is, do you guys see a scenario out there Where you are not operating any casino assets in Macau at some point in the near future. And I'm sorry to be so blunt, but it's a question I think a lot of investors are pondering right now given The vagueness that has come out of the Chinese government about what they're actually looking for?

Speaker 2

I do not. I see no chance of that whatsoever. I think we're Look, I'll refer to this I apologize if I sign a broken record. But the truth is we've been doing this for a couple of decades. We have The unparalleled track record, the old Cotai development was the one guy did that and at Shelton, We've one guy put $15,000,000,000 in ground of non gaming and gaming assets.

Speaker 2

One company made almost $4,000,000,000 EBITDA and I think we Have been stellar with our employees. So I remain beyond confident that we'll be operating in the Cowen. I don't think there's any chance whatsoever that We wouldn't be. And I'm not saying that rhetorically, I mean that sincerely. Every indication we've gotten is the opposite.

Speaker 2

So we again, I'm very proud of our track record, proud of our Development and proud of our investment, but I think the government has recognized we've been awfully good licensee and partner and friend to China And we're going to be back there. So no, I don't believe that's a possibility.

Speaker 14

Okay, great. Thanks for that color, Rob.

Speaker 2

Sure. Anybody else?

Operator

Your final question is from the line of David Katz from Jefferies. Your line is open.

Speaker 14

Hi, Austin. Can you hear me now? Yes.

Speaker 2

We got you fell asleep on us because you're in Macau.

Speaker 14

There is No sleeping, Jefferies. I appreciate you talking back to me. What I was really hoping to have the team's perspective on is really VIP Gaming, Because we do spend a fair amount of time talking with investors, with people on the ground, etcetera, around What the VIP what the future of the VIP business really looks like? There have been some sort of public pressures on it, Talk about currency changes and things like that, that presumably would have some impact. What is the solid recovered core look like in VIP?

Speaker 2

Yes, I just want to let Grant take that question. You're talking I assume and the whole jumping issue, etcetera. Yes. Okay. So let's begin with a little bit of historical perspective.

Speaker 2

Again, for the 20 plus years we've been doing business in Macao, we've heard this, This isn't going to work. That's not going to work. The revenues will never go anywhere. Even if it's for off on, segments are going to fall apart. The latest thing is to say the VIP is going to I just remain a huge believer in that market of all segments.

Speaker 2

Obviously, we've made our strength In the mass premium math, that's been our bread and butter and will continue to be, but I don't think she's ever discount. Those who have discount this segment has done it That's our own peril. I think it can it could move to a different channel, a different way of being available. But gamers are going to keep Happening in all segments in the calendar. I just as a precursor to the Grant's comments, I think you have to realize how powerful this market has been.

Speaker 2

The growth has been Unbelievable. None of us who started back in 2002, 2003, 2004 never could have dreamed the way every segment just developed. In the 2010, 2011, 2012 year, it was the junk as we drilled Macao Ceccia then morphed into a premium mass market and now premium mass mass market. And again, our company has been more focused on those base mass and PMS segments, but the VIP has served the market very well. So I think we emerged in a different form with different channels of distribution and that's my take.

Speaker 2

Grant, you're much closer to this, so please speak up.

Speaker 4

No, I think you said it very well, Rob. I think it's important to remember again the Proportion of profit coming from that segment, especially I think you're more referencing the junket segment versus our own VIP business, It's very, very small. It's really low single digit pre COVID. So I know people spend a lot of time talking about it, but our business is really geared To that large scale destination resort with premium mass, mass, the leisure, the FIT And the future is going to be that structural growth in those segments as well as the non gaming, the retail, the mice. And so that's where really our reinvestments and asset base have really focused on.

Speaker 2

I think the driver to Grant's point, the driver that market is always going to be what we're focused on is lifestyle, Extraordinary entertainment, restaurants, retail rooms, that's where our investors will see the London, that's where the focus was. The 4 Seasons is more towards the Very high end premium mass, but no matter what form it takes, the gamblers going to just keep growing over there and the desire to come to the cows will grow. So Whether it be the new assets we built another company, it just enhances the market. And I don't think there will ever be a lack of customers The lack of visitors to Macao, the problem is going to be when the market comes roaring back in whatever it is 'twenty two or whatever. I think the problem is going to be lack of capacity, The lack of rooms that market has always been burdened by needs new capacity, needs new lodging because whether it be base mass, premium mass is no longer a Hong Kong dependent Overnight markets, it's a stay overnight market, it's a leisure market, it's a business market, it's a spectacular market and we're going to be there with everybody else trying to get our fair share and I think our new assets, if you ever get to see them, and we're hoping to do next year, I was going to surprise you.

Speaker 2

What we've done with the Londoner and Four Seasons is The best thing we've ever done in my opinion. So look forward to getting back to Macau and getting back to business. Thanks, David.

Operator

Thank you, speakers. There are no more questions. And ladies and gentlemen, this concludes

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Earnings Conference Call
Las Vegas Sands Q3 2021
00:00 / 00:00