Sands China Ltd, a Macau gaming concessionaire and the Asian arm of Las Vegas Sands, states that it fell to a $125 million net loss and $14 million adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss in the month of August. According to the company, the main reason behind the losses is the tight restrictions concerning the border between Macau and mainland China.
In an investors’ disclosure that outlined COVID-19’s impact on its operations in the previous month, Sands China reported a massive drop in revenue compared to July. That month, it had net revenue of $265 million, while the net revenue for August was $148 million. Hence, the net loss widened from $63 million to $125 million.
The EBIDTA loss in August, which was $14 million, follows after a positive EBIDTA of $44 million.
Macau Visitors Required to Submit Negative COVID-19 Test
As stated by Sands China, the drop in revenue was due to the tighter restrictions that were implemented at the end of July and most of August. Visitors from Guangdong Province in mainland China were required to submit a negative COVID-19 certificate issued no more than 48 hours before their visit. For a brief period, the timeframe was 12 hours, before it was eased to a 7-day period at the end of August.
Even with the $340 million net loss and $162 million EBIDTA loss during July and August 2020, according to Sands China, the company has a $2.56 liquidity position. It consists of $2 billion of borrowing capacity under a revolving credit facility, as well as $556 million in cash. The loan was made in 2020 to boost its liquidity.
A statement by the company says that it has taken various measures to stay focused in the current changing environment. These measures include a reduction program in cost and capital with the goal of minimizing cash outflow for items that are not essential.
Relaxed Borders to Aid Recovery
Speaking on the current border situation, Sands China stated that it is looking forward to welcoming more guests to its properties, considering the fact that more visitors are now able to travel to Macau. The customer demand from those that have been able to stay has remained robust. However, due to the COVID-19 restrictions and the current pandemic situation in China and Macau, the financial performance of Sands China continues to be hindered and the number of visitors is still limited.
Sands China concluded that the pandemic has disrupted its operations and has affected the number of visitors to its properties. It added that this adverse is likely to continue to the point where COVID-19 is contained and the restrictions are loosened.
Even though many experts thought that the pandemic would be over within a few weeks to a month when it started in 2020, it proved to be a major global problem as many industries were hit. More than one and a half years later, COVID-19 is still a problem for which no expert knows when will it end.