The Marina Bay Sands (MBS) incurred a loss of more than $100 million in the second quarter, the resort's parent company Las Vegas Sands (LVS) reported on Wednesday. The loss comes on the heels of an almost three-month-long shutdown due to the coronavirus-led lockdown that saw almost no occupancy at the lavish resort.
The travel and tourism industry has been one of the biggest casualties of the Covid-19 pandemic, with countries having imposed restrictions on travel. MBS is one of the biggest resorts in Singapore and has been feeling the heat, all the more because of its huge staff strength. The loss, however, won't pose as a hindrance to its massive expansion plans announced last year.
Crippled by Coronavirus
Marina Bay Sands incurred a loss of $113 million (S$156.5 million) in the second-quarter 2020. This compares to a profit of US$346 million (S$479 million) over the same period in the previous year. Both figures refer to EBIDTA. Understandably, the pandemic is the only reason behind the company sinking into the red as hundreds of its rooms lay vacant for months due to the shutdown.
However, putting an end to speculation, LVS said that it doesn't have any immediate plans of slashing jobs. The LVS had more than 10,000 employees in its Singapore property as of 2019 end. Instead, the resort will go ahead with its previously announced capital expenditure program in both its Macau and Singapore properties.
In fact, analysts had cast doubt on the $9 billion expansion plans that were announced last year by Singapore's two integrated resorts (IRs) after Resorts World Sentosa (RWS) announced that it was contemplating job cuts.
Expansion to Continue
MBS and RWS last week had said that despite huge losses they would go ahead with their planned expansion that is slated for completion by 2023 and 2025, respectively. LVS's chief executive Sheldon Adelson once again confirmed during the earnings call that the expansion will be carried out as planned but the completion might get delayed now.
"These delays are principally related to the impact of the pandemic, and we will provide additional updates in the future as conditions are continuing to evolve," he said. MBS' $4.5 billion expansion plan includes a fourth tower and an entertainment area along with other amenities.
However, things might not be that smooth for LVS if the situation continues like this. Singapore is a major holiday destination for both Europeans and Americans, with MBS emerging as one of the biggest attractions over the past decade. LVS itself recorded a net loss of $985 million in the second quarter compared with a net profit of $1.11 billion in the year-ago quarter.
Revenues nosedived 97.1 percent to $98 million from $3.33 billion previously. However, both the IRs that they would finally start reopening their facilities as per the government's guidelines, with limited access to casinos.