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Gaming operator Sands China has reported US$125 million in net losses in August, double the amount reported in the previous month, showcasing the impact of the local Covid-19 cluster had on the group’s results.
After four Covid-19 cases were reported in the city on August 3 tighter border restrictions were implemented in Macau affecting visitation to our properties, with travellers from Guangdong being required to submit a negative nucleic acid test certification issued within 48 hours, which tightened to 12 hours for a period, and then eased to the more relaxed 7-day requirement near the end of August.
‘Demand for the Group’s offerings from customers who have been able to visit remains robust, but pandemic-related travel restrictions and the evolving COVID-19 situation in Macao and mainland China continue to limit visitation and hinder the Company’s current financial performance,’ the group says in a note issued to shareholders.
The group then reveals that its net revenues dropped by 44 per cent from US$265 million in July to US$148 million in August, with its adjusted property EBITDA going from a positive US$44 million in July to a negative US$14 million in August 2021.
‘[Sands China] has taken various mitigating measures to manage through the current environment, including a cost and capital expenditure reduction program to minimize cash outflow for non-essential items.
As of August 31, 2021, Sands China had total liquidity of US$2.56 billion, consisting of US$556 million of total cash and cash equivalents excluding restricted cash and cash equivalents and US$2.0 billion of available borrowing capacity under the 2018 SCL Revolving Facility.
‘The Group believes it is able to support continuing operations, complete the major construction projects that are underway and respond to the current COVID-19 Pandemic challenges,’ the filing with the Hong Kong Stock Exchange adds.
The group is also planning to issue a series of senior note and use the net proceeds and cash on hand to redeem in full the outstanding principal amount of the US$1.80 billion 4.600 per cent 2023 notes.
Sands China’s adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) rose to US$132 million in the second quarter, up from US$100 million in the first three months of 2021.
It also posted an aggregate loss of US$166 million in the second quarter of 2021, an improvement from the US$213-million loss in the preceding quarter.
