Las Vegas Sands Corp.’s board is “seriously considering” paying a dividend as early as next year as growing cash from Macau and Singapore exceeds the casino company’s needs for potential expansion in Asia and Europe.
The board also is mulling share buybacks after setting aside enough cash to fund at least 30% equity in future casino resort opportunities, Chairman and Chief Executive Officer Sheldon Adelson said in an interview with Bloomberg Television’s “InsideTrack.” Cash is growing at a rate that would equal Las Vegas Sands’ debt by the end of 2013, he said.
Adelson, who predicted in May that his company would generate more than US$3 billion ($3.78 billion) in cash flow this year as gambling in Asia accelerates and Las Vegas recovers, said earnings before interest, taxes, depreciation and amortization may “substantially exceed” those expectations if “reliability and predictability” continue. The company’s Singapore resort, Marina Bay Sands, is on schedule to earn “close to” the US$2 billion in Ebitda that some analysts have forecast, he said.
“Having more money is not a bad thing,” said Adelson, whose family owns a controlling stake in the company. “I want to make sure that we have enough cash to put up the equity portion of anything in development.”
Las Vegas-based Sands continues to negotiate with Spain to develop a casino resort strip, Adelson said. He expects either Japan or South Korea to decide to allow integrated resorts, which include casinos and convention space, next year.
“If one makes noises about legalizing gaming, the other is going to jump right in,” said Adelson, 78, whose company has been lobbying both governments for years. “It appears it’s coming to the top, coming to the fore.”
MASSACHUSETTS, FLORIDA
Las Vegas Sands, which is hosting a meeting with investors today in New York, may pursue U.S. projects if new jurisdictions such as Massachusetts and Florida allow casinos and if shareholders push for smaller developments, Adelson said.
Singapore authorized just two casinos, which were opened last year by Las Vegas Sands and Malaysian rival Genting Bhd. Lessons learned from Singapore mean that Las Vegas Sands could build an equivalent resort for about half the almost US$6 billion that Marina Bay Sands cost, Adelson said.
“We will not scale down, we will design the project and tighten up the program,” Adelson said. “We’ve learned to be more efficient on the building. We could cut down a lot of space.”
BOOMING MACAU
Macau, the only place in China where casinos are legal, could “easily grow” total casino gambling revenue 50% or more this year, Adelson said.
Las Vegas Sands, through its Hong Kong-listed unit Sands China, is developing casino resorts in Macau to add to its existing properties, the Venetian, Four Seasons and Sands.
Macau revenue surged 47% to 173.1 billion patacas ($27.4 billion) in the eight months ended in August. The territory, about 40 miles west of Hong Kong, surpassed the Las Vegas Strip as the world’s biggest casino hub by revenue in 2006.
Las Vegas is recovering from a record two-year drop in gambling and conventions. Gambling revenue on the Strip increased 7.5% this year through July, according to the latest data available from the Nevada Gaming Control Board.
“I do feel Las Vegas is coming back, albeit slowly,” Adelson said. “The gaming propensity in one respect has gone down in the United States, and has gone up because more foreigners, particularly Asians, are coming to Las Vegas.”
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