Las Vegas Sands (NYSE: LVS) provided a positive surprise to investors today as the largest casino operator by market capitalization said it will reinstate its quarterly dividend.
The payout had been suspended for more than three years as the gaming company sought to conserve capital during the early stages of the coronavirus pandemic and as the Macau rebound took longer than expected to materialize. Sands made the dividend announcement in conjunction with reporting its second-quarter earnings.
For the June quarter, Sands earned 46 cents a share on revenue of $2.54 billion. Analysts expected earnings of 43 cents on sales of $2.39 billion. The operator adjusted property earnings before interest, taxes, depreciation, and amortization (EBITDA) of $973 million with $541 million derived from its five Macau properties and the remainder coming from Marina Bay Sands in Singapore.
On the basis of generally accepted accounting principles (GAAP), Sands China Ltd. (SCL) second-quarter net revenue “increased to $1.62 billion, compared to $368 million in the second quarter of 2022. Net income for SCL was $187 million, compared to a net loss of $422 million in the second quarter of 2022,” according to the operator.
The Las Vegas Sands investment thesis is buoyed by the fact that Venetian Macau and Marina Bay Sands are two of the most profitable casinos in the world.
Sands’ cash position is one of the sturdiest in the industry. At the end of the second quarter, it had unrestricted cash of $5.77 billion with access to $3.67 billion in borrowing capacity.
The company has $14.70 billion in debt and repaid $1.20 billion on a Sands China credit revolver during the June quarter.
“Our financial strength supports our ongoing investment and capital expenditure programs in both Macao and Singapore, our pursuit of growth opportunities in new markets, and the return of capital to stockholders,” said CEO Rob Goldstein in the statement.
