Marina Bay Sands suffers losses amounting to US$113 million in Q2 due to circuit breaker closure

In the second quarter of this year, Marina Bay Sands (MBS) suffered a loss of US$113 million (S$156.3 million) after it had to be closed down for three months during the circuit breaker period.

This is in comparison to US$346 million (S$478.5 million) profit it made between April and June 2019, said MBS’ parent company Las Vegas Sands (LVS) on Wednesday (22 July) in the United States.

Both the mentioned figures refer to Ebitda or earnings before interest, tax, depreciation and amortisation.

In LVS’ press release, it didn’t announce any layoffs, adding that the US casino giant would carry on with its previously announced capital expenditure programmes in both Macau and Singapore. LVS also stated that it had more than 10,000 full-time employees in Singapore last year.

In 2019, expansion plans worth S$9 billion was announced by Singapore’s two integrated resorts (IR), however last week Resorts World Sentosa (RWS) revealed that it would be letting go of some staff. Although RWS did not say the number of staff that would be laid off, The Straits Times (ST) reported that it could be about 2,000 employees.

Even so, MBS and RWS said last week that they will go ahead with their expansion plans, which are expected to be completed by 2023 and 2025 respectively.

While speaking at an earnings call on Wednesday, LVS chief executive Sheldon Adelson pointed out that there is some progress on the expansion of MBS, however added that there could be some delays in terms of the timing of the project.

“These delays are principally related to the impact of the pandemic, and we will provide additional updates in the future as conditions are continuing to evolve,” he said.

The expansion of mainly non-gaming offerings was announced, as well as an extension to the exclusive rights for the two to run casinos in Singapore until the end of 2030.

The Government had declared that the IRs have to pay a higher tax rate on all gross gaming revenue if they don’t meet their investment commitments.

MBS’ S$4.5 billion expansion comprises of a fourth hotel tower, an entertainment arena as well as more events space.

In the Q2 of 2020, LVS has also suffered a net loss of US$985 million (S$1,362.6 million), compared to a net profit of US$1.11 billion (S$1.54 billion) in the same quarter in 2019.

If that’s not all, revenue plunged 97.1 percent to US$98 million (S$135.5 million) from US$3.33 billion (S$4.61 billion) previously, due to the worldwide closures of its casinos due to the COVID-19 pandemic.

As for Singapore, both IRs closed its doors for more than the two-month circuit breaker period, which started on 7 April this year. Given that attractions are viewed as areas with high risk of transmission for the novel coronavirus, the venues have only be given the green light to resume operation from this month, subject to capacity limits and approval.

Both IRs stated that they will slowly resume their businesses earlier this month, with casino access limited to only members and annual levy holders for the time being.

MBS also said that certain venues within the complex, like the Sands Expo and Convention Centre, theatre and Marquee nightclub, would be opened at a later date and will be in accordance with the Government’s guidelines.

As a whole, the total revenue for the second quarter of the year dipped to US$23 million (S$31.8 million) from US$688 million (S$951.6 million) a year ago. Out of this, casino revenue dropped by US$7 million (S$9.7 million). It previously recorded US$468 million (S$647.3 million).

Despite a rather bad performance, Mr Adelson remained optimistic and added that the company is witnessing early stages of recovery in each of its markets. He also remained positive of an eventual recovery of travel and tourism spending as well as future growth prospects.

“We are fortunate that our financial strength will enable us to continue to execute our previously announced capital expenditure programmes in both Macau and Singapore, while continuing to pursue growth opportunities in new markets,” he said.

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