The operator of the Sands Fourth Quarter 2023 Earnings Conference Call introduces the speakers and reminds participants of the call's purpose. The speakers include the Chairman and CEO, President and COO, Executive Vice Chairman of Sands China, and CEO and President of Sands China and EVP of Asia Operations. The call will contain forward-looking statements and will discuss non-GAAP measures. The company's actual results may differ from the statements made. The speakers refer to an earnings presentation and ask for one question and follow-up per participant during the Q&A session. The CEO notes the strong financial performance in Macao, with $654 million in EBITDA for the quarter, and mentions expected growth in both gaming and non-gaming revenue.

SCL continues to dominate the Macao market with the largest share of non-rolling table win, rolling table win, and slot ETG win. Their ongoing $1.2 billion Londoner reinvestment program is expected to drive future growth in the market. LBS has invested $15 billion in Macao to date and is confident in the market's potential for growth. MBS in Singapore has delivered record-breaking EBITDA despite ongoing renovations, with strong performance in gaming, lodging, and retail. Non-rolling tables at MBS are exceeding $20 million in daily drop.

The third paragraph of the article discusses the success of ADRs and the retail component at MBS, as well as the company's plans for future growth. It also mentions changes to the company's financial reporting format, which will no longer include hold-normalized adjusted property EBITDA. Instead, the impact of expected hold in rolling volume segments will be provided.

The company generated strong operating results in the fourth quarter of 2023, with adjusted property EBITDA of $654 million in Macao and $544 million in Marina Bay Sands. However, the EBITDA would have been higher in Macao and lower in Marina Bay Sands if they had held as expected in their rolling segment. The company also saw an improvement in margins in both markets when considering expected hold for the rolling volume segment. They are focused on driving revenue growth and margin expansion through investments and high-value visitation. The company is optimistic about their progress and long-term growth prospects.

Joe Greff asks about the progression of base mass recovery in the fourth quarter and the potential pickup in January. Rob Goldstein declines to comment on the current quarter but mentions the encouraging market appreciation in Macao in January. Grant Chum adds that base mass showed 8% sequential growth and is continuously progressing, with visitation levels almost at 90% of 2019 levels. He also mentions improvements in transportation infrastructure and a desire to take advantage of non-gaming events. Rob Goldstein asks Grant if it is fair to say that transportation and visa processes are improving in Macao after COVID.

The speaker believes that while the ability to reach their desired goals has been improving, the desire for the destination is even stronger. This is evident in the recovery of domestic flights and ferry passengers, as well as a significant increase in foreign visitation. The company also has the capacity to absorb base mass business as it continues to grow.

The company has seen $1 billion in buyback activity this past quarter and plans to continue this strategy in the future, although the amount may vary. They believe in the long-term benefits of share repurchases and will be aggressive when possible. The renovations for Sands Cotai Central/Londoner are expected to have a similar level of disruption and contribution as the first renovation.

The renovation of the Sheraton Hotel has already begun and is expected to be completed in the first quarter of 2025. There may be some disruption due to construction, but the company is experienced in managing this and will continue to yield the rest of the portfolio. The first half of the year is expected to be relatively normal, but there may be some disruption in the second half. By 2025, the Londoner will be in a significantly improved state. Phase II will focus on renovating the majority of hotel rooms and the other main gaming floor on the Sheraton side.

Rob Goldstein and Grant are discussing the market's concerns about London disruption. Rob believes that if the market continues to accelerate, they can overcome the disruption by using other assets in the portfolio. Additionally, the eventual transformation of Londoner will be a juggernaut and will be on par with or beyond other assets. This will give them two assets that can potentially make $3 billion by themselves. While there may be some disruption in 2024 and 2025, the end result will be worth it. Stephen Grambling asks about Singapore and Patrick Dumont explains that the focus is on quality of tourism, not quantity, and they have been investing in high-quality assets to attract high-value tourists.

The Singapore market is attractive due to its growing high net worth population, family offices, business activity, political stability, and strong tourism infrastructure. The market is still growing, with potential for more visitors, especially if visa-free travel is implemented. The current results of the market are impressive, despite the building being under construction and lacking amenities. The company is bullish on the trajectory of the business and sees potential for growth in high-value tourism. The capacity-constrained building in MBS limits the number of rooms and suites available, making the right type of tourist important. The company believes the asset can grow 10% to 20% over the next three to four years.

The company is optimistic about their plans for a new building in Singapore, which they believe will generate $3 billion in EBITDA by the end of the decade. They are currently at $2 billion and expect to reach $2.4 billion before reaching $3 billion. The company is disappointed that they do not have more space in Singapore, as it is a desirable market. They hope to have a deal for Phase II finalized soon. The company believes in the Singapore market and expects favorable returns on their $1 billion investment in Phase I. They plan to provide an update on the timing and cost of Phase II soon.

The speaker believes that investing in high-quality assets will lead to better service levels, higher pricing, and more high-value tourists, resulting in growth in EBITDA and margins. They are currently finishing the third tower in Singapore and are confident in its success. They also have plans for a new building, but there are still discussions with the government and many details to be worked out.

The company is working towards getting all the necessary approvals for a project in Singapore and is confident in their progress. The promotional environment in the premium mass segment is intense, but the company is focused on driving product and events to attract visitors and improve margins. The underlying margin has grown by 100 basis points and there has been a sequential improvement in mass margin.

The speaker is discussing the competitive market and how they believe that product and service quality are the most important factors for success. They use Londoner and Grand Suisse at Four Seasons as examples of this. They also mention that they have a structural advantage in terms of capacity and that their margins and dominance remain intact in all segments in Macao.

Grant Chum and Wilford Wong discuss the uneven recovery in mainland China's source markets, particularly in terms of visitation rates from non-Guangdong provinces. While some wealthier provinces have recovered beyond pre-COVID levels, overall there is a progressive improvement in all source markets. China's economy is still recovering, but the company's quarterly performance has been trending well.

The paragraph discusses the healthy growth in the number of visitors to Macao, especially from the non-confidential region. It also mentions that Macao is becoming a top tourist destination for short-haul travelers from mainland China. The question then shifts to the retail portfolio and how it is performing in the current market. The speaker, Rob Goldstein, mentions that the retail portfolio is doing well and provides specific numbers for different areas in Asia. He also mentions that there is potential for improvement and growth in the retail sector.

The speaker discusses the success of their retail business, which attracts high-value customers in Macao and Singapore. They mention the ongoing improvements and re-merchandizing efforts in their malls, particularly in Macao. Despite high hold rates in Singapore for the past three quarters, the speaker reminds that the business is still subject to mathematical odds and fluctuations in luck. They caution against assuming a consistent trend in hold rates.

The speaker believes that the recent changes in betting patterns in Asia will not have a significant impact on their overall percentage. They explain that short-term deviations from expected results are normal and that over time, the mathematics will prevail. They also mention a previous experience where they lost money to certain players, but ultimately, those players lost it back. The speaker and another person on the call believe that the business will stay within the expected range over time.

The speaker discusses the recent quarter's performance, mentioning the interesting differences between Macao and Singapore. They emphasize the importance of consistency in the games and the unique characteristics of Asian gamblers. They also mention not letting a few successful quarters change one's views on backlog mathematics. The speaker then answers a question about Chinese New Year and the timing of a decision in New York. They express hope for a decision this year and discuss their bid for the project, but cannot provide any further insight. They conclude by mentioning the short booking windows for the current quarter.

The speaker, Patrick Dumont, provides an update on the room count and disruption cadence of the Phase II project in Singapore. He mentions that the current room count is around 2,200 and will decrease to the mid 1,600 range during the peak of construction in Q3. However, the impact on revenue is expected to be minimal as the affected rooms have lower yields and the renovated portion of the building is performing well.

Brandt Montour asks about the ending key count for suites and normal rooms at the company, and also asks about the company's efforts in non-gaming spending. Rob Goldstein notes that the company has been investing in non-gaming areas for a long time and believes it adds value. Grant Chum adds that in 2023, the company invested heavily in non-gaming categories, such as entertainment, with successful shows like the Jacky Cheung concert and a residency by a popular singer. This has set a new standard for residencies in Macao.

David Katz asks about share repurchases and the company's focus on Texas. Patrick Dumont responds by stating that the company sees value in both equities and non-gaming investments, and that they have been heavily investing in areas such as MICE, art and culture, themed attractions, and gastronomy. He also mentions that the company has exceeded their original forecast for investments and plans to continue doing so in the future. Wilford Wong adds that they are the leader in the MICE market and have been promoting Macao as a destination for non-gaming activities. David also asks about the family's stake in the company and their activities in Texas. Patrick does not reveal any specific plans for share repurchases, but mentions that the family takes a long-term view on their stake. He also does not provide any information on the family's activities in Texas.

The company is bullish on their long-term growth prospects and will continue to invest in growth opportunities. They generate a lot of free cash flow and plan to use it to return capital to shareholders through share repurchases and dividends. They are actively trying to facilitate the development of integrated resorts in Texas and are excited about the potential for unique tourism assets in Dallas. The family is also happy with their investment in the state and will continue to be part of the business community there.

The company is focused on bringing integrated resources to the state of Texas and developing opportunities there. They are committed to investing in Macao for long-term growth, but also generating significant free cash flow. They plan to decrease leverage over time and may resume dividends at the Sands China level once leverage decreases and EBITDA increases. The decision to resume dividends will be determined by the Board.

The company plans to begin paying dividends in the future and maintain its investment-grade rating while investing in growth and returning excess capital to shareholders. In regards to Macao, the company expects margins to improve as the market recovers and revenue grows. The company will benefit from scale and the expansion of its customer base.

The speaker discusses the company's improved cost structure and how it will benefit from increased revenues. They also mention the promotion of Grant Chum and take a question about the turnover rent mechanism at their Macao properties.

The speaker, Rob Goldstein, thanks and congratulates Wilfred Wong and Grant Chum for their contributions to the company and their recent promotions. He also acknowledges their team and expresses gratitude for their efforts. The conference call ends with a thank you and a goodbye from the operator.

This summary was generated with AI and may contain some inaccuracies.