Welcome to the Las Vegas Sands Corp. 4th Quarter 2013 Earnings Call. I will now turn the call over to Mr. Daniel Briggs, Vice President of Investor
Thank you, Rachel. Before I turn the call over to Mr. Adelson, please let me remind you that today's conference call contains forward looking statements that we are making under the Safe Harbor provisions of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward looking statements. Please see today's press release under the captioned forward looking statements for a discussion of risks that may affect our results.
In addition, we may discuss adjusted net income and hold normalized adjusted net income, adjusted diluted earnings per share and hold normalized adjusted diluted earnings per share and adjusted property EBITDA and hold normalized adjusted property EBITDA, all of which are non GAAP measures. A definition and a reconciliation each of these measures to the most comparable GAAP financial measures are included in the press release. Please note that this presentation is being recorded. We also want to inform you that we have posted supplementary earnings slides on our Investor Relations website for use. We may refer to those slides during the Q and A portion of the call.
Finally, for those who would like to participate in the question and answer session, we ask that you please limit yourself to one question and one follow-up, so we might allow everyone with interest to participate. With that, let me please introduce our Chairman, Sheldon Madelson.
Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. We are extremely pleased with our strong financial results, which reflect continued execution of our strategic objectives. The highlights of the quarter from my perspective are as follows. We delivered outstanding growth in revenue, cash flow, net income and earnings per share once again this quarter, with our whole normalized adjusted diluted earnings per share increasing 33.8 percent to reach $0.87 per share.
We produced another record quarter in Macao, where we continue to grow faster than the Macao market than mass table games, the most important and profitable segment in that market. We also realized strong growth in the VIP segment. Importantly, growth was also on display in our non gaming hotel, retail and entertainment offerings in Macau. This enhances both the growth profile and profitability of our portfolio of properties on the Cotai Strip, while contributing to Macau's diversification and appeal as a leading business in leisure tourism destination. The confidence we have in the strength of our business and the reliability and predictability of our cash flows have allowed us to raise our recurring annual dividend for the 2014 calendar year to $2 per share, an increase of 42.9 percent compared to the $1.40 per share recurring dividend we paid in 2013.
Our Board of Directors has announced that our Q1 2014 dividend of $0.50 per share will be paid on March 31, 2014 to holders of record on March 21, 2014. In addition to the dividends we paid in the Q4 of 2013, we returned nearly US225 million dollars of capital to shareholders during the quarter through stock objectives that we have outlined in past earnings calls. Focusing on organic growth, old normalized adjusted property EBITDA across our Macau property portfolio grew 55.8% to reach a record $887,600,000 Our mass table win in Macao for the quarter increased 58.3 percent to reach a record 1,220,000,000 dollars in a market that grew approximately 40% in the quarter. So our growth rate was nearly 47% faster than the Macau market in the most important and most profitable segment in Macau. We've grown faster than the Macau market in mass table games every quarter this year.
1 year ago, we generated approximately $770,000,000 in mass table win and we grew that in each successive quarter to $867,000,000 $929,000,000 $1,060,000,000 dollars and finally $1,220,000,000 in the Q4 of 2013. Our annualized environmental profit in this segment has increased to approximately US2.2 billion dollars from approximately US1.4 billion dollars over the last year. That growth has allowed us to bring an additional US800 $1,000,000 annually to our departmental profit and EBITDA. I guess there's no wonder that analysts and journalists are saying that we leave the market by far in mass market and in premium. We see this trend continuing in the future for three reasons.
First, more people are visiting both Macau and our property portfolio on the Cotai Strip. Visitation from China to Macau was up 10% of the year ended December 31, 2013, while mainland visitation to Macau from outside the neighboring Guangdong and Fujian provinces was up 15%. Growth from the more distant is meaningfully exceeding the visitation growth from the neighboring Guangdong and Fujian provinces. We believe the growth trend will be enhanced by infrastructure investments as tens of 1,000,000,000 of dollars of investments in Macao, Guangdong Province and Southern China enable more people to more easily reach Macao and accelerate Macau's evolution as the leading business and leisure destination in Asia. The infrastructure investments include the world's most extensive high speed rail network, a US10 $1,000,000,000 bridge directly connecting Macau and Zhuhai with Hong Kong and more than US20 $1,000,000,000 of investment in the special economic zone of Anshan Island, which is adjacent to Macau and Guangdong Province.
2nd, as visitors come from further away, they stay longer and they spend more money on dining, retail and entertainment. Overnight visitors to Macau have the time to enjoy the full complement of entertainment amenities of the Cotai Strip and are spending 2.1 nights on average in Macau. Of that 2.1 night length of stay for overnight visitors has increased. It's still far below Hong Kong's average at 3.7 nights. We believe there is room for expansion in Macao's average length of stay for overnight visitors and increasing length of stay will contribute to growth.
3rd is our database of customers continues to expand, we have the ability to further optimize our mass table productivity across our property portfolio. In particular, we will continue to have the ability to increase the utilization of our market leading 9,000 plus hotel room and suite inventory on the Cotai strip for our most valuable mass gaming customers. We're pleased that we have expanded our mass table productivity to US12143 dollars of mass win per table per day across our Macau property portfolio from just US9,700 and We're confident that we have additional opportunities to optimize our table productivity across the portfolio in the quarters and years ahead. The VIP business is also exhibiting strong growth with our rolling volume increasing 26% to reach a record US49.54 billion dollars That represents rolling volume per table of approximately US1.23 million dollars per day, which was a record for the company and was up 33.7% compared to the quarter 1 year ago. The Venetian Macau delivered another record quarter.
And due to our market leading investments in non gaming offerings continues to lead the Macau market in visitation and business and leisure tourism appeal. A fundamental multi tier integrated resort development strategy, which features convention, exhibition, hotel, retail and entertainment offerings, e. L. F. Delivered 17,400,000 visits in the quarter to our property portfolio, including over 8,000,000 visits to The Venetian Macau alone.
EBITDA at The Venetian Macau increased to a market leading US433 million dollars for the quarter. When you take 8,000,000 visits per quarter and you multiply that by 4, that's more than the number of individual unique visitors to Macau. When you take $17,400,000 that's the equivalent of let's see that's $440,000,000 over $60,000,000 people, I think closer to 70,000,000 people for the year when only 30,000,000 unique visitors arrived in Macao, which means the Venetian Macao is a must see for everybody who comes in. Or of course, one can conclude that we have 1,000,000 people coming in 32 times or we have 32,000,000 people coming in once each or likely it's something in between. So when you think about it that you capture everybody, every visitation for every unique visitor, it's an amazing statistic.
Sands Cotai Central, our latest and largest property on the Cotai Strip, continues its steady ramp and delivered $237,000,000 in EBITDA this quarter. On a whole normalized basis, Samsco Dias Central generated $273,000,000 in EBITDA during the quarter and it's approaching a $1,100,000,000 annualized EBITDA run rate. And that's only for the Q1 this year. By the time we get to the Q4, we'll be running at that point at hopefully a significantly higher run rate. Perhaps the most important takeaway from the strong performance of both the Venetian and Sansco Dicenter is the clear positive impact that the increased critical mass of convention, exhibition, dining, retail and entertainment offerings, including over 9,000 hotel rooms, brings to the overall tourism appeal the GOtv strip.
Our property portfolio was attracting customers who were staying longer, which in turn is driving growth for both properties. The Venetian and Sands Cotai Center work together to meaningfully enhance the overall appeal of the Cotai Center, increasing both visitation and length of stay and attracting a more valuable set of customers to Macau and the Cotestrip. This increases the returns across our entire property portfolio. We couldn't be more enthused about the future benefits to both The Venetian and Sands Cotard Centre that the additional dining, retail and offerings of the Caribbean including 3,000 more hotel rooms and suites will bring to the Cotai Strip. Now turning to Marina Bay Sands in Singapore.
On a whole normalized basis, we generated US372 $1,000,000 of EBITDA. Mass gaming win increased to US4.63 dollars per day, I believe for the first time. In addition, our hotel business reflected strong growth with ADR increasing to US425 dollars and occupancy approaching 97%. We expect to drive growth in the future as we focus our marketing efforts on high value visitors from the surrounding Southeast Asian region. Turning to development growth in our current markets.
Construction continues at the Parisian Macau, our 5th property on the Cotai Strip and our 6th in Macau overall. We remain on budget and on schedule. Subject of course to timely government approvals that may be required, we continue to target a late 2015 opening of our latest integrated resort. In addition, we have now started construction on the St. Regis Tower, the 4th and final tower of the Sanch Gota Central.
We are targeting the Q4 of 2015 for the completion of that project, which will add over 700 additional hotel and apartment units to our portfolio on the Cotai Strip. Moving on to the pursuit of opportunities the pursuit of opportunities for integrated resort development in new markets and geographic areas. In Asia, activity levels in Japan have increased and we are pursuing the potential for integrated resort development in this promising market with great enthusiasm and optimism. Korea has also shown increased activity and we're looking forward to the potential development of the convention based integrated retail business model together with our history of market changing developments in Las Vegas, Singapore and Macau that deliver meaningful and measurable economic benefits for our host markets, including increased employment, business and leisure tourism and visitor spending, position us exceptionally well as we for these development opportunities. Finally, let's turn to one of our favorite subjects, the return of capital this year.
Through December 31, 2013, we have returned more US5.5 billion dollars to our shareholders through dividends and stock repurchases over the last 2 years, including over $4,800,000,000 to Las Vegas Sands shareholders and over $700,000,000 to the non LVS shareholders of Sands China. As I mentioned before, we have raised our recurring annual dividend for Las Vegas Sands Sands to $2 per share for the 20 14 calendar year, an increase of 42.9 percent. For Sands China Limited, we've increased the interim dividend for 2014 by 30% to HK0.87 dollars Since China Limited is also paying a special dividend of HK0.77 dollars in February. We have every intention of increasing the dividends at Las Vegas Sands and Sears China in the years ahead as our business and cash flows continue to grow. At December 31, we have over $1,400,000,000 remaining under our current stock repurchase authorization at Las Vegas Sands and we expect to purchase at least $75,000,000 of stock per month.
We look forward to continuing utilize the program to return capital to shareholders and to enhance long term shareholder returns. We are pleased to have completed the refinancing of our U. S. Restricted group credit facility and to have extended the tenure of that debt on very favorable terms through the end of the decade. Looking ahead, we expect to maintain the strongest balance sheet in the industry, which provides another meaningful competitive advantage as we pursue global growth opportunities.
It's a tentwister. People have asked what leverage level we would be comfortable with in the future as our cash flow grow cash flows grow. We would be comfortable with the gross leverage debt to EBITDA ratio of between 2.0 times and 3.5 times before additional debt related to the future development of integrated resorts in new markets. Note that our leverage ratio is 2 times today. So we have the capacity to increase our leverage levels as we see fit and still stay within the range.
So in summary, we are successfully executing our business model and we have outstanding operating momentum as we look to extend our leadership position in convention based integrated resort development and operation. We are the vision we are the visionaries of the convention based integrated resort business model and the leaders in the industry. Couple that with our financial strength and our disciplined focus on operational excellence, not to mention our good looks and charm and I couldn't be more confident about our future success. It's my job together with our outstanding management team to make sure we stay disciplined and continue to execute our strategies that will both extend our industry leadership and come into new markets and generate strong growth and outstanding returns for our shareholders in the years ahead. Yay dividends.
With that, let me turn the call over to the operator to begin the Q and A session.
Your first question is from Joe Greff from JPMorgan. Your line is open.
Good afternoon, everybody. Most of the questions we're getting from investors this evening relates to Singapore and I'll save a follow-up for something else. And I know you kind of gave us the normalized EBITDA performance in the quarter. What was the normalized for hold EBITDA margin in
the 4Q at MBS? About 47%. Okay. A little north of 47%.
Okay. And are we thinking with we're seeing progress obviously in the non rolling chip and the slot handle that the segment margins in that are probably going to be lower than where we have historically just because the cost of acquisition and promos and comps related to hotel rooms are impacting that?
Joe, it's Rob. I think we're first of all, we're seeing increased volumes in both all our businesses there, except for the rolling chip piece. Very pleased with the growth in the farm visitation, very pleased with the growth in the non rolling spot ETG segments, especially the premium portions. I think our margins remain low-60s in that most important segment. I feel pretty good about it.
Obviously, we're paying more for our hotel rooms because we are getting very, very high cash rates, the highest in the Singapore market. Our ADRs keep getting higher and higher. And so we're paying more for those rooms. But nevertheless, I'm really pleased with our team as far as the rolling chip non rolling chip play slot end table. The issue there obviously this quarter is all about the whole percentage on the rolling chip piece and that's continued to be a disappointment And hopefully that will level out.
We're confident that our range 2.7% to 3% is reasonable and achievable. But clearly this quarter we missed by quite a
And then my follow-up relates to capital allocation broadly. Sheldon, do you think you're being at 3.5 times gross leverage impedes your viability for new integrated resorts? And the reason why I ask it in that sense is that Could you just what? Does that change your ability and your view to compete, I. E.
Having a phenomenal balance sheet when it comes to the competitive level for new IRs in Japan or South Korea?
Phil, I'm glad you brought that up because I forgot to add an addendum to my prepared remarks. We probably have somewhere between $12,000,000,000 and 14,000,000,000 dollars worth of monetizable retail mall sales potential. We could wipe off every dollar that we owe and more if we just monetize our increasingly valuable real estate. We were just talking this morning about the average sales per square foot on the very hard through the roof square foot sales in U. S.
Dollars on the first level of the shops at Four Seasons. And the lower amount on the second level, which is increasing now with close to an average of 10,000 visitors going across our pedestrian air condition, moving sidewalk, pedestrian bridge between Sanskotai Central Land of a Nation. The average for the two levels, I think is $4,600 a square foot. The highest mall in the United States is the Forum Shops across the street, followed in 2nd place by the Grand Canal Shops here at The Venetian. The Forum Shops is only about $1200,000,000 $13,000,000 or $1400 a square foot.
Our worst mall is doing better than that. So we've got plenty of cash. We could be highly competitive to doing 2, 3 or maybe even 4 properties in emerging markets. And I pray that we will have 2, 3 or 4 emerging market possibilities. So I have to tell you, we are pumping money out of here.
We yesterday, we were talking about our balance sheet and the financial department said how much cash we had on hand. And Mike Levin and I looked at each other and say, do you realize these are unspoken words that we come from the slums in Boston, both of us. The best you can say about them were they tenements. That's the best you could say about where we came from. So we looked at each other and we said, look at the 1,000,000,000 of dollars we got sitting there.
Could you ever imagine it was unspoken, we looked at each other and our looks at all the words. Can you imagine when we grew up in Dorchester area, Dorchester, Ruxbury, Metapan, section of Boston, we'd have 1,000,000,000 of dollars sitting in bank, what we're going to do with it.
So just a follow-up to the comment about monetizing the retail real estate assets. So are you commencing a process now? Or is it more of a theoretical at this point?
No. We are commencing the process for final approaching final approval from the city of from Macau SAR. So if and when we decided that it was time to monetize them, all we'd have to do is pull the trigger.
Got it. Thank you very much.
You're welcome.
The next question is from John Oh with CLSA. Your line is open.
Thank you. Gentlemen, if I
could start with maybe looking out in Cotai, we expect several new properties opening in 20 15 and in 2016, including the Parisian. What do you think will happen to your existing Kotai properties over this period? And I guess, I'm trying to see, how do you plan to stay competitive? Or do you think that the additional supply can be easily absorbed by the market?
Your last statement is right on the mark. You hit the nail right on the head. The market is growing. As we talked about earlier, the infrastructure improvements in Southern China are so overwhelming. In 2016, there's going to be a second airport in Macau.
It actually won't be a second airport in Macau, but it will be shorter to get to Macau from the Hong Kong International Airport, servicing 180 cities with 100 scheduled carriers. It will be shorter to get to Macau in 20 minutes from there than it will be to drive to Hong Kong Island for 45 minutes. So the infrastructure and the demand, John, you know as well as anybody and you're probably one of the most with all the other analysts on the phone, the foremost analysts and knowledgeable in this field. You know that this is a supply driven industry. Let's not forget that.
The more properties go up, I've always the more properties go up, the faster we grow. I have my vision. When I looked at the Bay and the Swamp that is today Cotai, I said that what will work here is critical mass. And I don't care, I said at the time, whether the critical mass is ours, which I'd much prefer, but the critical mass comes from ours and others. That critical mass is going to make the GOAT test strip Asia's Las Vegas.
And a rising tide carries all boats. When the Venetian alone is getting almost 10% more visitation than the number of unique visitors that arrive in Macau, I don't understand how other people can compete with us. When we get 2.5 visitations from each individual unique visitor to Macau, I don't see how anybody can compete with us. Between now and the time it is open, there'll be 3 properties opened in 2015: Galaxy, Macau Studio City and The Parisian. We may open before at least one of them.
I'm happy to say that we are very pleased with our budget and our schedule. I can't give you the details because things can change. But right now, I'm quite happy with the progress. So we have the largest footprint, meaning we have more square footage of casino space than any of the other competitors maybe more than 1 or 2 or 3 have. Secondly, we have more gaming tables than everybody else, because we ended up building more non gaming and therefore the attraction to bring in more people.
So we ended up more tables. When they put the cap on, we were leading the table count. Number 3, as I repeated in my prepared remarks, we are the leader in the mass market and we are growing. You see the growth from 9,000 to 12,000 in just 12 over 12,000 in just 12 months. We're the leader in the mass market.
And although Emtell is doing quite well in the premium mass, we're rapidly catching up and we hope to and expect to suppress them. So we're not and we have 9,000 rooms. We're building about 700 more plus 3,000 I mean at the St. Regis, plus 3,000 and we're in the process of putting through the implementation of the commission that we have to sell the 4 Seasons apartments on a co op basis that will put another 300 units. We had the foresight and the vision to build because the whole vision for Cotai was ours, mine.
We had the foresight and the courage to build the number of rooms and the amenities that we did. We're now getting paid for that.
Okay. If I could follow-up with just another question. On your prepared remarks,
you said that you're expecting substantially higher EBITDA for
Kotai Central to over $1,000,000,000 in EBITDA in a very short period of time. Could you give us
a sense of how much more headroom do
you think we can expect? And is the improvement largely going to come from mass or is it going to come from VIP? Thank you.
I'll give that to Rob. He hasn't spoken so much today.
Hey, John. How are you doing? SEC, your rights ramp to $1,000,000,000 but we think there's a lot more running room for a lot of reasons. The best 2 would be room is the biggest driver of mass gaming and as well as VIP gaming in Macau, 5,700 keys at Sanzco Thai Central. We also opened our Dragon Master Room later this year, probably in the spring.
I think we're just starting. We're in the infancy of A lot of people are questioning its viability. Now it's growing at $1,000,000,000 plus. Our next goal is $1,200,000,000 $1,300,000,000 The only thing is a lot of room to grow there. The only inhibiting that property is that it's our biggest win per unit per day in the mass side.
It's doubled from $6,600 per table to $13,900,000 Q4 of 'thirteen. So that's a wonderful ramp. Can it get to 15,000, 16,000 table? We believe it can. We believe Dragon Master can drive the premium mass.
And honestly, it also competes the junket segment. I walked through the new retail space on the 3rd floor last week and I think that property just has a lot more room to grow. Everyone was excited about $1,000,000,000 threshold, but that's just the beginning. So we are very excited about all the segmentation. Just like The Venetian, it's got rooms, Dragon Master, Premium Mass, Pure Mass, Junk and Play.
So SCC has a wonderfully bright future with lots of growth in it.
Perfect. Thank you.
The next question is from Shaun Kelley with Bank of America. Your line is open.
Good afternoon, guys. I wanted to start by going back to your comment in the prepared remarks about the going up to 3.5 times gross leverage, that number was a little higher than actually we were expecting. And I was just wondering, do you guys think there's an optimal time to begin kind of thinking about this given where we stand with kind of record low interest rates and still and possibly forecast for those rates to start to move higher? Just any thoughts on that would be helpful.
Well, that outside number is thinking about the possibility of getting some money and doing something with it. Right now, we don't have we don't have any demand for large amounts of money. So the 1,000,000,000 of dollars of EBITDA are throwing up 1,000,000,000 of dollars of free cash flow with nothing to do with it. And when I joke around and say, yay dividends, I think that's what I and every other shareholder wants to hear. Yay dividends.
Yay stock buyback. What are we doing with the money? We're in a position that I'm basically a debt averse person. And I never want that I had bad experiences when I was a kid, when I'm still a kid, but I'm a little older on the calendar. But I don't want to be in a position where I owe money.
I had to put a bit take $1,000,000,000 out of my pocket in 2008 and 2009 because we owed money. So I don't want to be put in a position that I'm just going to speculate and owe money with no immediate liquidatable obligations. If anything if we have money to borrow to do something with, if we can't do it with development, I mean, if we got an okay to go into Japan, for instance, tomorrow morning, we're not going to need 1,000,000,000 in money until 2 or 3 years from now. So we got plenty of time to build up the money. And I've concluded that each and every integrated resort will have its own standalone financing and it's not going to be financed with equity from our other income producing properties.
We went through that with our previous management. We're not going to go through that again. So we're not at 3.5. We're far from it. And I'm not even sure we want to get up to 3.5, but we want to be honest and fair with you and tell you there's a possibility we could go there.
But for those of you who know me personally, you know I'm debt averse and that I'm not going to take any money that I can't quickly repay to I've had enough lessons in my life about making sure that I have enough cash flow to take care of my obligations.
That's really helpful, Sheldon, and really appreciate the candor. You brought up Japan in that discussion as well. So maybe switching to that topic, if you could just give us a little bit of an update about where you see Japan in the kind of in the timeline in the phase right now? And very specifically, is it your thought right now that partnerships are going to be required for to enter into Japan? Or just how do you think about partnering with someone else for that project?
I just came back a few days ago from Japan seeing people there. So I'll let him answer that question.
Thanks, Sheldon. Sean, it's Mike. I just came back from Japan. I was there a week or so ago. The process in Japan, which has been made public is that, of course, the first legislation passed.
The second legislation should be passed in June, which forms the committee to set up the regulations and the locations as well as the information for bidding for whatever sites are selected. Today in Japan, everybody that we've spoken to believes that that second piece of legislation is going to pass. And we are preparing we're ramping up our people there. We're opening an office there. We're doing all the work in order to do that.
The talk about partnerships was in most of the conversations in Japan. The level of partnerships was not. There's interest from some major Japanese conglomerates, some major Japanese companies to participate. But until we they really know the licensing situations and the investment realities, we don't know for sure whether that will take place. We have made comments to much we've been talking to that we are not a closed door on some of those partnerships.
And we've been advised by certain members of the Japanese community that to keep the door open and keep the mines open in that situation. So we don't know exactly what's going to happen, but it's likely that there could be partnerships involved.
Great. I'd like to add something on to that. Not one of the companies in Asia in Japan have had operating experience. I think Universal, a former RUSI had a position on the wind board, but none of these guys have an infrastructure to operate integrated resortscasinos. We went through this fervor for partners during the Macau, the Singapore tendering period.
And everybody fought and did everything they can to line up to the best of partners they thought could be made available. Now the partners will say they'd like to be partners, they think all they have to do is put up some money with you and their partner. They don't understand how this industry is regulated. When they have to set put up a stack of application papers with personal histories of every member of their Board of Directors of every one of their subsidiaries. I think their appetite to be partners that is to satisfy the other jurisdictions in which companies like ours are licensed.
They may have to prove that they're worthy in Singapore and in Nevada. And when they look at the papers they're going to have to file, I think they're going to do an above face and much in the other direction.
Great. Thank you, everyone.
One other thing I want
to add, Sean, in that situation. In the meetings in Japan, we are in a very favorite position. Essentially about 22% of our non gaming business Singapore, Marina Bay Sands has Japanese components to it either visit visitors or meetings or conventions. We're very well known there and Marina Bay Sands is often talked as the model for what the integrated SOAR facility Tokyo or Osaka would be like. So we are in a very leadership position as far as having that opportunity.
Thank you, Mike. That's actually really helpful.
Your next question is from Felicia Hendrix with Barclays. Your line is open. Hi, good afternoon. Rob, you touched on this a bit before, but I wanted to get more granular. The mass win per table per day obviously continues to impress and you surpassed your the prior goal that you set the 12,000 win per table per day goal.
And I see you shifted the chart a little bit in the presentation. So just wondering what's the next benchmark there? What's your timing to get there? And if you could just walk us through some efforts you're making at the properties other than Sandsco Thai Central to get to your next benchmark?
So on all portfolio, Felicia, you're talking
about across.
Yes. Yes. Obviously, results in the next one, our table gain optimization Cowen, we're really pleased with capital. We dropped our rolling tables from was 525 in Q2 of 2013 to about 402 currently. And yet we've increased our role.
So we're maximizing the role on the VIP side. We're very pleased about that. We're getting more utilization of the game. So obviously, great. But the real story, as you know, resides in the math side.
And think the real story there is we've got about 1100 tables. As you noted, we've exceeded our stated almost 12,000 per day. The question now is how much higher can we get? And I think the real answer resides in the thought that we have all these about 9,000 keys on Cotai, in addition to the infrastructure improvements, in addition to the fact that our focus in that business is both and all throughout the mass portfolio, not just the premium mass, the super premium, but the pure mass mass. I think there is where our advantage is well placed.
No one else can compete on the pure mass side. So about 800 games right now, we're doing about 8000 to 9000 a day. As we grow that segment, although our premium mass and Dragon mass from 56, I don't know if we get to 13,000, 14,000, 15,000, 16,000. I believe we can. People were skeptical.
We certainly go from we doubled sand's coat type from 6 to 13. Venetian is a juggernaut, probably the most successful casino in the world today, 500 plus mass table games in excess of 12,000. Can we ramp the entire portfolio of 14,000, 15,000? I believe we will. I can't tell you the timeframe.
I can't tell you the next 2 quarters. I can't tell you the 14 or 15, but there's no reason to believe as we penetrate beyond Guangdong, as sleeping rooms become the biggest driver of gaming, We have that unique advantage of all those sleeping rooms. And as the infrastructure improvements, the cultural propensity gamble, it all works in our favor. Our team there, we nailed Chris and I were there last week, the focus is completely on this segment and all three tiers of the segment. So we're very favorable in the belief we can grow it.
I don't want to put a timetable in mind. We thought 12,000 was a pretty aggressive goal of turn that we passed that. Next stop 13,000, 14,000, 15,000 to table. Couldn't be more pleased with our progress, couldn't be more pleased with our ability to grow our rolling win as well as our mass. And we also believe there is one more hidden advantage that is our real estate in both SCC and Venetian enables us to put more ETGs in the floor to talk to that cable customer who can't play their limits for posting now.
So we're in a very, very preferred position and we feel very confident there's big growth ahead for
us. Thanks, Rob. That's really helpful. And just as a follow on, Rob, maybe do you foresee the opening of the new resort on Henshin having any kind of benefit in Macau this year?
I do. I believe Henshin is extraordinarily positive for us in Cotai. It affords more sleeping opportunities, more visitations. It's a wonderful development for all Cotai. But again, with our 1500 gaming tables, we're more advantaged.
So all gaming all casinos are not equal. Those who have more retail, more sleepings, more gaming positions are more equal. And we are more equal at the Venetian and SEC. So as the market brings more customers and that's pensions that benefits us dramatically. So I think it's wildly positive for us, yes.
Great. Thank you for the color.
Sure.
Next question is from Steve Wieczynski with Stifel. Your line is open.
Good afternoon, guys. So Rob you talked about with Singapore with that VIP market being pretty tough at this point, trying to go out and identify more of those customers inside that region. Can you dive into that a little bit more? And then maybe what kind of conversations have you had with the government in terms of eventually allowing that junket structure to come into play there?
Well, the junket structure, Steve, is not in the table. Let's be clear about that. We've not had conversations. We wait and listen to the government's advices and frankly that's not in discussion at all. So if you break out the rolling versus non rolling, let's be real clear, we are very pleased where our non rolling business is going.
We ramped to 4.6% again, came back from that dramatic low a couple about 6 quarters ago. Couldn't be more pleased with what our team has done over there because developing the Jakarta based, Malaysian based, Japan based customer, we're seeing a real growth there on the premium side, both slot and table. We're not seeing as much pure mass play. That play is disappearing, frankly, both Singaporean, both of us and RWAs saw that low as a result of the government's approach. Going back to the premium side, look, we're very disappointed.
We can't seem to play lucky last year and a half or so. We have total confidence with the best people on the ground looking at it that we will return to a 2.7%, 3.0% range. However, I must caution you, I don't believe there's going to be significant rolling growth in Singapore in the foreseeable future. It's going to remain a pretty much flat market in my opinion. It's Mainland Chinese driven.
We want to maintain our $60,000,000,000 or so a year goal. We want to hopefully get our whole percentage back to a good place. We want to focus on margin to grow a better yield. But we believe the growth is going to be in the non rolling segments for us. The real opportunity to make money in Singapore resides in the non Singaporean based premium cost in both slot and table.
Okay. Thanks. And second question, I know it's not an overly important market for you guys, but with Vegas, your numbers there were strong. And what's your outlook for into 2014 just in terms of that group and convention business?
2014 convention business is in very good shape actually for Vegas. The convention business is really the best market we have at the moment. Rates are moving up a little bit in the convention area, which is good. So I think you can expect a good convention year, probably one of the best here in Vegas.
Okay.
Thanks. Your next question
and on margins there. It seems like this is the 2nd quarter where commissions were a little bit higher on the VIP side than I would have anticipated and that obviously weighed on the margin a little bit despite clearly the higher margin mass ramping nicely at that property and across the portfolio. Could you guys shed a little bit of light on
maybe what's going on the VIP side and the commission number specifically? Yes. I must say, Carlos, yes, start to run because of $2,000,000,000 run rate, I'll take a lesser margin. We're now ramping that place. It's heading for $500,000,000 a quarter.
So we can live with it. We're very pleased with the numbers. And I think to your point, the mass tables are the driver there. Having said that, the mix of business, the Venetian, both premium, we're mixing premium direct as well as the VIP piece. And the mix sometimes ends up affecting margin in terms of commissions paid.
As you know, we have a structure there that's both win based and volume based. So it's purely in the mix. There's nothing out of sync with it. We made a lot of money in both the junket side this quarter as well as VIP Premium Direct. Feel very comfortable we're heading there.
But again, you can't at The Venetian, you can't argue those results. It might be the 1st property in history to push $2,000,000,000 of EBITDA. So the mix may come quarter to quarter vastly and may affect our margin visavis the rolling segment. But I think in the aggregate, the margin was about 37%, 38%. Feel pretty good about that.
Great, Rob. That's helpful. And then if
you wouldn't mind just following up
on that, you mentioned a little bit of the premium mass. And if we
were to think about that in
the old adage that you guys have talked about the obviously the power of that mass revenue dollar relative to VIP. As we layer in more of that premium mass business, should we be thinking about that relationship of mass revenue relative to VIP to EBITDA dollars any differently?
These are all going to be niche now, right?
Across the Macao portfolio.
Got you. No, not really. I think we believe we're going to trade in the 45%, 45%, 46% margin across portfolio on the non rolling segment. Clearly, we have this ridiculous advantage of having lots of pure mask gains that run as much as 50 point margins on them. So the blend will be in the mid-40s probably higher than most.
To your point, we'll trade lower in the premium mass, but still we're seeing that reside in the 41%, 42%, 43%. The beauty of our portfolio is we're not super premium mass or premium mass dependent. We have lots of pure mass and that's where the margin will keep kicking up. So I believe we can grow our yield to hopefully as I referenced earlier to Felicia, dollars 14,000, dollars 15,000, dollars 16,000 a day blended and maintain a 44%, 45%, 46%. The Venetian story, I think, what's happened there, what has happened so favorably is we've always had the mass business there.
We started to develop as our premium mass and that's where I think the growth story in The Venetian specifically. As we drive home that premium mass customer, use our theming a room product. Again, I believe Venetian is going to hit a $500,000,000 quarter one of these days because the blend of that business, that's the only property in Macao that's on all cylinders. All three portions of the mass segment, the junkets, the retail, it's a traffic machine as Sheldon referenced and it's got all the cylinders working. That is a juggernaut.
And no reason in my mind that can't be a $2,000,000,000 store on a run rate sometime this year or next. But I'm very confident we maintain margin and keep growing our yield per table.
Great. Thank you. And then just one quick follow-up on Marina Bay Sands. And I know that Sheldon commented earlier on it. But when you look at the life to date at this property, I think there's something like $185,000,000,000 of total VIP roll that's come through.
And I want to say life to date hold at the property is about 8% below that theoretical level. Is there anything structural about your customers there? Or maybe it's betting patterns, maybe it's tie bets things like that that maybe should influence a lower hold? I remember being told one time, players from certain jurisdictions play ties more and that drives hold up. But in this instance, do you guys think there's anything structural there that we should think about?
Or is it just a string of less than fortunate luck?
I spent hours last week in Singapore where we hired a number of experts to look at our mix of business. And they pay people a lot of money to tell us what we already believe and that is structurally sound and it should be in the range of 2.70 to 3. I'm as frustrated as anybody as a manager who is paid to create EBITDA. I found it very frustrating. I sat through a 4 hour lecture from 3 very smart people.
What they told me is you're going to hold 2.7 to 3. And the only I can tell you, Carlo, and I will tell you this. 1, highly concentrated, doesn't the one mistake we made in Singapore is we should have built it inside Mainland China with the border like Macao. But if you don't have as much pure volume as you have in Macao. 2, you let people bet $1,000,000 USD a hand that creates volatility that is frustrating, but valid.
3, pairs and tie betting, which you know drives the margin of our baccarat business, some of our better customers don't bet pairs and ties. We wish they would, but they're betting it less and that's a wise gambling choice. And so that's impacted somewhat. Having said that, in the aggregate, 3 very smart experts along with Andrew McDonalds after he lectured me and I listened very carefully. I walked away saying, Chuck, we should be holding 2.7 to 3.
Be patient and keep taking all the action. And that's all I can tell you. There's nothing structurally wrong. We have to keep our head down, keep bringing the business, be margin focused and watch it return to a better day. We saw this years ago when I was young, we used to watch Caesars Palace go through this.
It is a very, very volatile, highly concentrated, very high bet. We've got over 100 guys who've got huge amounts of money each quarter. One of these days, we'll give you guys a 4% quarter and all this will go away. Unfortunately, this is not that quarter. So bear with us and watch Singapore perform.
Yes, for sure, Rob. Thank you very much. That was really helpful.
Your next question is from Cameron McKnight with Wells Fargo. Your line is open.
Good afternoon. Thanks. A question perhaps for Rob, just a follow on from Carlos' first question. On the premium mass side of the market in Macau, premium mass is a term that we're hearing a lot of operators use and talk about now. Are you seeing any signs that that segment is becoming any more competitive on the fringes?
Surprisingly, I'm not. It's a great question. It's a very valid one. I ask that of Ed and the team all the time and frankly we're not seeing it. The market is so frothy and so rich that everyone's participating.
I am fearful that margin erosion, but thus far we haven't seen that. The customer still seems more focused on the environment. We've created some wonderful environments to gamble in, obviously service, obviously room product. I was at the 4 seasons last week watching rooms for these guys betting huge amounts of money. And I was mesmerized by the amount of people there in the middle of the week betting huge amounts of money, having fun.
I don't see it. So fortunately, the markets remain rational. There is so much good business in Macao. It's such a staggering market that's very appealing to any operator. So far, I've seen the silliness I've seen in other markets in the last 35 years.
So the answer respectfully is no. We're seeing lots more business and maintain margin.
That's a very interesting question. There are 2 indicators that provide a predictable prognostication. It's tough to prognosticate particularly about the future. The first one is, we run from 1.3 nights average day to 2.1 in less than a year. What does that mean?
The second item what it means is the second item, which is the people are traveling from further away and we have an upside potential of that when the Hong Kong Macau Zoo High Bridge opens in 2016. And we see now more and more people that are coming from further away. And when they do, they bring more money in a higher gaming budget. So it's evidenced by the 2.1 nights average stay and the infrastructure is bearing fruit that people are coming for a longer stay. And when they do that, they bring more money.
And when they do that, you increase the premium mass on a predictable basis. You've heard Rob mentioned the word Dragon Master. The Dragon Master is what somebody in the had a nightmare and called the space that we're building in Lot 5, the premium mass space. I suppose it didn't mean Dragon Master. No?
Would you go for a combi master? Anyway, so those are the indications. The expansion of the infrastructure to bring people from further away and the promise of more of that. When you open that bridge, 180 cities will be serviced by the airport that's only 20 minutes from you, serviced by over 100 airlines. So as people somebody before asked a question about it, you're going to be too crowded when everybody opens up?
As I said, I think it was John Oh, we're in a supply driven industry. And we could see by the indications that the future looks much brighter and it's predictable and reliable than it is today.
That's great. Thanks. And Sheldon as a follow on with the bridge opening in 2016 and linking Macau to Hong Kong International Airport, do you think that will really and perhaps finally give Macau a leg up in the convention and exhibition business versus say for example Hong Kong, which is far more accessible for international travelers?
Yes. It's accessible only because of the airport.
Yes.
And if that airport essentially is right in the middle between Hong Kong and Macau, then it'll substantially increase the viability of the convention and exhibition market?
Cameron, that's the biggest objection now from big groups and big conventions in terms of having to fly into Hong Kong and take a boat. And that objection gets removed with our mice capability at in the Cotai Central as well as at the Venetian. We stand in a major position to benefit from that MICE activity, which is midweek business, which is the opportunity area for significant improvement
continually. Great. Thanks very much.
You're welcome.
Your next question is from Robin Farley with UBS. Your line is open. Great. Thanks. I wonder if you could comment a little bit more on Singapore.
I know you mentioned that you expect it to stay at that $60,000,000,000 level. But just looking at Q4, I guess it's the lowest volume in the last 2 years. And how you get comfortable that that's in the range of normal and that there are still $20,000,000,000 quarters coming? Is it related to the number of events held that makes you comfortable that $13,000,000,000 is not where it's moving towards rather that it's going to stay at that $60,000,000,000 a year?
Well, Roche, Closest convertibility on the yuan and inflation. They're both going to contribute
I think Devin's factors coupled with the fact that we did you're right, it's a light quarter compared to the 18.2% we did Q1 last year or even the 14.4% we did Q2 of this year. I guess my answer is, Rob, it's super concentrated and 2 more guys, 3 more guys, 4 more guys, 12, it's $1,000,000,000 a roll. I wouldn't take too much stock in fact, it's a light quarter, you're absolutely right, but we can easily do $17,000,000 $18,000,000 which puts right back our normalized run rate of 60. Dollars I think $15,000,000 a quarter blended for the year is a realistic estimate. Could I be off by here and there, a quarter it was up to $18,000,000 and down to $12,000,000 Yes, I could.
But I think in the end of the day, if you want to be super conservative, drop it to 55%, 60% blended for the year, I think you're very safe. I'm more focused on the margins and the whole percentage right now, because I don't think there's significant growth beyond that right now. But to your point, it was a weak quarter. There's no denying that. But we had an 18.2 quarter a year ago.
I would be surprised to see Q1 pop that number again. It doesn't take a lot. We've got some special events coming in on the horizon. David Beckham shows up. It makes a difference.
So I'm not that concerned that we can pop the numbers and say, well, more concerned, we can hang on to the money and we can maintain a margin to drive our EBITDA back to 1.6, 1.700.
Okay, great. Thanks. And then lastly, can you give a little more color on kind of the approval process for the apartments in Cotai? It sounds like you're going to be actively under construction there and just if there's any approval needed for those sales?
No. We've you're going to say something. An okay from the government of Macau to proceed with the proceed with the St. Regis Tower. We've got an EOK to monetize the through the co op basis for the Four Seasons.
However, they have not had any experience with the legal infrastructure. And we are sending in to the counsel of the community, the General Counsel of Macau. We're sending in knowledge and experience from the major go up market in the world. That's New York City. We're having the law firms acquaint them with the structure.
So their lack of familiarity with the structure is holding back there, okay, for little things. But we expect in the near future that that should resolve itself. And they knew that I wasn't going to build the St. Regis until I got the okay for the Four Seasons. And now we're building the St.
Regis and we'll have it ready before the end of 2015 at or about the time we're going to have the Parisian opened. And again, we're just adding to the most precious commodity there and that is the room supply.
Okay, great. Thank you. Your next question is from Harry Curtis with Nomura. Your line is open.
Hi. Just a quick question for either Sheldon or Rob. Can you talk a bit about the license renewal or the concession renewal process that initial discussions in Macau could begin in 2015. How do you expect that to go?
Harry, this is Mike. I'll answer for the since you didn't ask me. The answer is simply, Secretary Tim made that statement about 6 or 7 months ago about 2015. We've had no further information whatsoever as to whether it start, whether where it will go or what have you. And you hear rumors all the time, but basically there is absolutely Secretary or anybody else at this point.
There are some thoughts that Sorry. That's okay. There are some thoughts that an additional license could be issued or 2. Do you buy that? No.
There's no reason to buy and not buy actually. I mean, at
this point, it doesn't look
to us that there'd be anything and you don't know you really don't know. And for anybody in your end or ours to make a speculation. The only thing we know is that more emphasis is going to be put on integrated resort type facilities with more non gaming facilities for operators. You're seeing some of the guys talk about that in the new buildings as we do. And that's the one that the government continues to talk about putting more emphasis on Macao for that kind of situation.
That's the only really factual situation we know.
Okay. And just my last question is, are there any direct investment opportunities for your company on Henshin?
There's been conversations about direct investment. You see that with Panzi Ho and some of Galaxy working in that area. We have had some conversations about leasing some space for office space things of that kind, but no direct financial no direct conversation about anything where there was actually a financial investment other than
that. Okay. That's it for me. Thank you. Thanks, Harry.
There are no further questions. Ladies and gentlemen, you for your participation on today's call. This concludes today's conference and you may now disconnect.
Thank you, everybody.