Sands China Faces Revised Q4 Performance Amid Challenges

In light of ongoing market challenges, Deutsche Bank has adjusted its estimates for Sands China's performance for the fourth quarter of 2024. This revision comes as Macau's gross gaming revenue (GGR) falls short of expectations, leading to a downward trend in market share. Deutsche Bank reported that the total GGR for Macau in 4Q24 came in approximately $120 million less than anticipated. In November and December, Sands China's GGR market share saw a decline, dropping from the typical 23-24 percent to a range of 22-23 percent. This drop significantly influenced the brokerage's revised assessments.

Impact on Q4 2024 EBITDA and Market Projections

Due to these developments, Deutsche Bank has adjusted Sands China's property EBITDA for the fourth quarter of 2024. The estimate has been brought down by about 9 percent, now standing at $566 million from a previously estimated $620 million. This figure also falls short of the consensus expectation of $624 million. The adjustments reflect a broader concern that market expectations for 2025 might be overly optimistic. Deutsche Bank suggests that a "deck-clearing" revision of the 2025 estimates could prove beneficial for LVS shares by potentially allowing market share gains as operations at The Londoner normalize. This prospective upward trend could act as a positive driver rather than simply meeting current projections.

Future Outlook and Considerations for 2025

Looking ahead, Deutsche Bank has modified Sands China's forecast for 2025 Macau property EBITDA, now pegged at $2.63 billion. This is roughly a 3 percent decrease from previous predictions and considerably lower than the consensus mark of $2.81 billion. The brokerage firm noted that market participants might be betting on a return to the 2023 market share levels of approximately 26 percent. However, Deutsche Bank views this projection as overly ambitious, taking into account persistent disruptions and the extended timeline for several projects, including those at The Londoner.

Source: Sands China 4Q24 performance estimates lowered amid market challenges: Deutsche Bank, January 15, 2025. 

Posted by Wizard
Jan 16 2025