Sands China Expected to Declare First Dividend in Five Years

Sands China Ltd, a prominent casino operator in Macau, is anticipated to announce its first dividend in five years this coming Friday, according to an analytical note from Morgan Stanley. The financial institution shared its expectations in a Sunday release, suggesting that the dividend announcement could coincide with Sands China’s upcoming board meeting. The analysts from Morgan Stanley expressed optimism stating, “We think dividend per share of above HKD0.2 [US$0.026] would be a positive.” Moreover, they foresee future growth in dividends, predicting a return to HKD2 per share, reflecting pre-COVID levels, which could result in a yield exceeding 12 percent.

Operational Updates and Market Projections

Despite recent expansions such as the opening of the Londoner Casino and the Venetian Arena, Sands China did not see a significant gain in mass market share during the fourth quarter, according to Morgan Stanley's observations. However, the institution remains hopeful that market share will increase as new luxury accommodations, over 2,000 Londoner Grand rooms and suites, become available in early 2025. This expansion follows the refurbishment and recent inauguration of the Londoner Grand Casino at the close of the third quarter.

According to company management, the strategic aim is to have the entirety of The Londoner Macao's room inventory ready by the bustling May Golden Week. Grant Chum, CEO and President of Sands China, communicated via a late January conference call that the continued enhancement of their hotel offerings is a priority. “We expect the continued ramp-up in rooms [at The Londoner Macao] throughout the first quarter and into the second quarter; the goal is to have the full 2,405 keys fully operational by May Golden Week and we believe we can achieve that,” he asserted.

Financial Performance and Dividend Outlook

In terms of financial performance, Sands China reported a 5 percent year-on-year decrease in fourth-quarter net revenues, which amounted to USD 1.77 billion. Additionally, the net income for the quarter was USD 237 million, down from USD 288 million the previous year. The adjusted property earnings before interest, taxation, depreciation, and amortisation (EBITDA) from Sands China's Macau operations reached USD 571 million in this period, indicating a decline from USD 654 million a year before.

The broader Las Vegas Sands Corp, the parent company of Sands China, announced plans to increase its annual dividend to USD 1 per share for the 2025 calendar year. The forthcoming quarterly dividend of USD 0.25 per share is scheduled for distribution on February 19. This highlights the organization's focus on enhancing shareholder returns as part of its strategic financial management. These financial details and projections illustrate Sands China's strategic navigation through recent economic challenges, underscoring its commitment to regaining and building market momentum post-COVID. With new developments on the horizon, the company is poised for potential growth, delivering value to its investors through strategic management and expansions.

Source: Morgan Stanley expects Sands China to announce on Friday the first dividend in 5 years, GGRAsia, February 19, 2025. 

Posted by Wizard
Feb 24 2025