Las Vegas Sands puts projects on hold, posts loss
LOS ANGELES (Reuters) - Casino operator Las Vegas Sands Corp_(LVS.N), which warned last week it was in danger of violating loan agreements, said on Monday it would suspend construction in Macau as it copes with a lack of financing options.
Sands also reported a narrower third-quarter net loss and said it expects to shortly release details of a $2 billion bond sale.
"The whole solvency risk is gone and it looks like the liquidity risk will be gone," said Jefferies & Co analyst Lawrence Klatzkin.
Sands has elected to significantly slow the pace of development activity along Macau's Cotai Strip "as we focus our current efforts on maximizing our cash flow and our returns on invested capital from our existing properties in Macau," Chief Operating Officer William Weidner said in a statement.
Majority-owner Chairman and Chief Executive Sheldon Adelson, speaking on a conference call, said the Macau government may act to help find financing for the projects.
The company also said it would suspend work on the St. Regis luxury-condominium project in Las Vegas and would focus on the casino components at its Bethlehem, Pennsylvania, development.
It still expects the Marina Bay Sands project in Singapore to open next year.
The Las Vegas-based company posted a net loss of $32.2 million, or 9 cents a share, compared with a net loss of $48.5 million, or 14 cents a share, in the year-earlier quarter.
Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income.
After adjusting for one-time items, Sands said it earned 2 cents a share in the quarter, well short of the 11 cents a share expected by analysts, as compiled by Reuters Estimates.
"The results weren't that bad ... Vegas was a little bit on the rocks, but that was expected," Klatzkin said.
The company said net revenue rose 67 percent to $1.11 billion, close to the $1.16 billion expected by analysts.
Sagging U.S. consumer spending power has hurt business in Las Vegas, where Sands operates the Palazzo and Venetian resorts, as well as the Sands Expo and Convention Center.
The company operates two casinos in Macau, where officials have recently restricted travel from mainland China, and has several more projects underway there as well as in Singapore and Bethlehem, Pennsylvania.
The company said in its U.S. Securities and Exchange filing on Monday that if it is unable to raise additional capital in the near term, it would need to consider further suspending portions, if not all, of its remaining global development projects.
The casino operator has also filed a shelf registration with regulators that would allow it to sell securities.
Shares of Sands, which have plummeted from a 52-week high above $122, rose 14 percent on Monday to close at $8.00 on the Nasdaq only to fall in after-hours trade to $7.45.
(Editing by Tim Dobbyn, Editing by Phil Berlowitz)
