Sands China net loss reaches $760m in Q2, before July lockdown impact

| By Zak Thomas-Akoo
Macau-based hotel and casino operator Sands China has reported a $760m (£626.4m/ €739.3) net loss in H1 2022, as ongoing Covid-19 measures continued disrupt the gaming market in the special administrative region.

This compared with a $381m net loss for the same period the previous year, a 50% year-on-year increase. Total revenue for the group was down 43.5%, from $1.62bn in the first half of 2021 to $915m.

All revenue streams collapsed during the period, but the largest decline was casino income which fell 51.9%, compared to its rooms, malls, food and beverage and convention, ferry, retail and other segments which all experienced more modest declines.

Sands stated that it has sufficient liquidity in place to continue as a going concern, with access to cash or cash equivalents of $766m, as well as $1.04bn in borrowing capacity. Additionally, Sands’ parent company Las Vegas Sands lent the company $1bn on 11 July.

Next Steps

The Covid situation in Macau remains fluid, with China’s continuing “zero-covid” policy meaning that even relatively small outbreaks by western standards can be the catalyst for strict government action.

An outbreak in mid-June led to the closure of all casinos in the former Portuguese colony from 11-23rd July. While casinos were able to operate after this period, continuing Covid measures, including the closure of most non-essential businesses, hit revenues and kept travel rates low.

The report made clear that business’ capacity for recovery is highly dependent on a fluctuating and unpredictable covid situation.

“While our properties were open and operating at reduced levels due to lower visitation with the required safety measures in place as described above during the six months ended June 30, 2022, the current economic and regulatory environment on a global basis and in Macau continues to evolve,” the report stated.  

“We cannot predict the manner in which governments will react as the global and regional impact of the Covid-19 pandemic changes over time, which could significantly alter our current operations.”

The report made clear that there is much scope for further damages to Sands’ operations:

“Additionally, there is uncertainty whether the impact of the Covid-19 pandemic on operations will continue in future periods. If our integrated resorts are not permitted to resume normal operations, travel restrictions such as those related to inbound travel from other countries are not modified or eliminated, there is a resumption of the suspension of the China individual visit scheme, or the global response to contain the Covid-19 pandemic escalates or is unsuccessful, our operations, cash flows and financial condition will be further materially impacted.”

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