Sands China has flagged its hopes of resuming dividend payments within the next year, with analysts suggesting this will likely take place midway through 2025.
The company’s senior management briefly addressed the issue during Thursday’s 3Q24 earnings call on Friday, stating, “The company will hopefully be a dividend payer in the upcoming year.”
Although Sands did not explicitly address the timing of dividend resumption, JP Morgan analysts said they “continue to model Sands China to resume dividend alongside its interim/2Q result, likely in a July/August 2025 time-frame.”
Citi’s George Choi also said he expects dividend payments to resume sometime in 2025.
A mid-2025 resumption would put such payments in line with the completion of long-running renovation works at The Londoner Macao as well as at The Venetian Macao’s Cotai Arena, which have significantly impacted Sands China’s earnings throughout 2024.
The renovation has included remodelling the old Pacifica Casino – now Londoner Grand Casino – which closed in May before reopening last month; Cotai Arena which shut down in January and will reopen in November; and the substantial upgrading of 4,000 hotel rooms at Sheraton Grand.
Sheraton is scheduled to reopen in May 2025 as the Londoner Grand hotel offering a total of 2,405 keys broken down as 1,500 suites and 905 rooms.
“The room disruption will subside significantly from January/February 2025 with 1000+ new suites in operation (versus only 300 suites back in operation from 4Q24), followed by the rest of the suites/rooms to reopen by May 2025,” said JP Morgan’s DS Kim, Mufan Shi and Selina Li.
“All-in, the disruption should have peaked in 3Q in our view, and Sands shares should gradually rebound into 2025 (and beyond) with newer and better assets.”
Sands China’s 3Q24 results, reported by Inside Asian Gaming early Thursday, comfortably beat consensus with revenue of US$1.77 billion up 1% quarter-on-quarter and Adjusted Property EBITDA of US$585 million up 4.3%.
While the company lost 220bps of Macau-wide GGR share due to the continued disruption, analysts believe the company is well positioned to rebound next year.
“Sands materially reduced player reinvestment,” stated Seaport Research Partners’ Vitaly Umansky. “Management has focused on not paying for business and reversed course from more aggressive actions in Q2, which we view as a positive.
“Sands will continue to face disruption in Macau in Q4, but with more redeveloped rooms and the Cotai Arena coming on-line by end of Q4 and into early next year, Sands is set up to gain share in 2025.”
Umansky added, “Sands’ competitive advantage in Macau in the long run is its scale (the largest casino operation, the largest number of hotel rooms, retail and F&B offerings, diversified product inventory) along with a revamped and more premium positioned Londoner product.
“Once the redevelopment is completed, and in a market that continues to grow, The Londoner could generate EBITDA similar to Venetian, which did US$1.4 billion in 2019. However, it will take some time to get to that level (likely 2027 or later in our view).
“Additionally, base mass has lagged recovery in Macau, relative to premium. Once the base mass recovery accelerates, Sands will be the lead beneficiary of this customer base.”
