Good afternoon. My name is Amanda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Corporation Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
Thank you. Mr. Daniel Briggs, Vice President of Investor Relations, you may begin your conference.
Thank you very much. Before I turn the call over to Mr. Adelson, let me remind you that today's conference call will contain 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 caption Forward Looking Statements for a discussion of risks that may affect our results.
In addition, we may discuss adjusted net income, adjusted diluted EPS and adjusted property EBITDA, which are non GAAP measures. A definition and reconciliation of 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 let you know that we have posted supplementary earnings slides on our Investor Relations website for your use. With that, let me please introduce our Chairman, Mr.
Sheldon G. Adelson.
Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. By now, you should have seen our press release and the related earnings materials, which are available on our website. Joining me on the call today are Mike, Rob, Chris and Ken. As the Founder, Chairman and CEO of Las Vegas Sands and the company's Chief Strategist, I am focused on delivering growth and maximizing shareholder value.
I think about our company pursuing these goals in 4 key areas: 1, organic growth in existing properties 2, development growth that's within our reach today 3, development of integrated reserve locations new to Las Vegas Sands and 4, return of capital to shareholders through growing annual dividends. To address point 1, our organic growth at our existing revenues. I would like to go through some highlights for the quarter in Macao, where our industry leading scale and infrastructure investments are creating impressive results in the largest and most profitable gaming market in the world. Our quarterly results in Macao reflect company records in virtually every category, and we expect our operating momentum to continue in the quarters ahead. For the quarter, our market share of gross gaming revenue on Macau Macao was 19.3%, up from 14.3% last year.
That is a 35% growth in market share. I just well, I'd also like to mention that our EBITDA numbers surpass any one of our competitors at any market share. I just want to mention that in reports that we saw this morning, our market share came in 1 in October in Macao was in excess of 20%, again demonstrating the growth faster than the market as our investments and strategies produce results. Our rolling growth was up 45.5% this quarter to a record $36,000,000,000 That represents VIP market share of approximately 17% of rolling volume for the quarter compared to just 11.4% 1 year ago. If you remember at that time, I said we were getting back into the good graduations of the checked address and this 49.1% increase in market share of rolling volume at TescoNav.
Our rolling win was up 54% during the quarter, while the general metall market was down 1% to the same period. That is really spectacular. While everyone else is experiencing declining volumes in their VIP business, we're delivering strong growth. Equally impressive is our strong organic growth and momentum in the mass segment in the town. Due to its higher margin structure, this segment is even more important to our future cash flow and bottom line results.
Our non rolling table win in Macao for the quarter was up 36.4% to more than $658,400,000 another company record. Our table productivity also improved linearly this quarter with wind to our mass table across our portfolio of properties expanding year over year by 26% to reach nearly US8700 dollars per table. Remember that we have the largest footprint in Macao. That's because we took our original strategy, called for us to take certain risks and the risk works out far beyond our expectations, except for Sheldon Adelson's expectations. I thought it was going to be a grand slam home run, and I was wrong.
It was a grand slam home run. The World Series of Tennis, not to mention Ping Pong and the Super Bowl. Can't be right all the time. Our table productivity has also improved meaningfully this quarter with way per mass table across our portfolio to $8,700 Now I'm turning to Singapore. We have very light this quarter in Singapore at just 1.79%.
That was really low hold. It cost us about $105,000,000 in EBITDA during the quarter. So on a hold adjusted basis, we would have produced EBITDA of just over $365,000,000 this quarter from Singapore, but it was coming. As Singapore continues to progress as a destination for business and leisure travel and entertainment and our marketing programs for the Asian region mature, Our business at Marina Bay Sands will continue to grow. We're implementing new marketing programs to both the premium mass market and VIP markets, beefing up our sales force and investing in aircraft.
The customers we are targeting with these efforts will come from the areas surrounding Singapore, Indonesia, Malaysia, Thailand and the wider Southeast Asian region as well as from Hong Kong, Taiwan, China, Japan and Korea, I think I missed Vietnam getting a significant amount of business from Vietnam. Point to development growth that is within reach today. We will generate substantial growth on our results in Macao, at Sam's Kokat Central Land as we are able to develop the provision on-site fleet. Turning to Sam's Cotard Center. Mats Table and Slub Business Turning to Sam's Cotai Center.
Mass table and slot business reflected meaningful growth this quarter. Total mass win per day increased by 15% compared to the partial quarter ended June 30 and reached $1,560,000 per day. We see strong operating momentum continuing in the quarters ahead, particularly as the additional hotel, dining, shopping and entertainment amenities of Phase 2 of Sands Cotard Central begins to make pickup deletions. Because those amenities were open only for 11 days during the quarter, that had minimal impact to this quarter's revenues. As a reminder, since April of 2012, we have opened more than 3,660 new hotel rooms, 2 new casinos in Macau.
In addition, we will open 2,000 new hotel loans in January 2013. That's great. I'd also like to say that our concept of bringing in international brands is paying off handsomely. We're running at very high occupancy rates in the hotel. We're bringing in business.
The people question Holiday Inn, but Holiday Inn is running extremely high. The Conlan has more demand than it has been there in supply. And the Sherwin had just opened recently last month, and we're doing splendidly at the ship. We still have 1 more tower to go, which will open, I suspect, within the next 90 days. The strategic advantages of the scale and critical mass of our portfolio of products on the Kofta Strip, including the air condition and People Mover Pedestrian Bridge, which will open in December, connecting Cotai Sector with the flu season and the nation on the west side of the Strip will benefit all of our colleagues on Cotard and strengthen our retail mall business.
As the Macau market continues to grow, we can see a time in an not too distant future, where Sands Cotab Central will have the opportunity to produce financial results that rival those of the nation of town. The Parisian Macau will add another integrated resource property to our portfolio on the Cotek strip. We're targeting it in late 2015 or earlier. We've already submitted our design plans to the discount business and pending up approval, we hope to be in time of work in the very near future. Point 3, development of antiquated reserve locations due from Las Vegas Sands.
We're committed to identifying and executing our new development opportunities in Asia. We have teams working every day in these locations to pursue this growth in Japan, Korea and Vietnam. Traveling behind a little bit is Taiwan, which will take a much longer time, and we still don't have time out of our sites. We also have been investigating opportunities elsewhere around the globe, including in Europe, North America and South America. During this quarter, we advised the government of Madrid that we have selected the City of Madrid as our UHRA latest development location as opposed to choosing Barcelona.
As I have said on numerous occasions before, we will only pursue projects with returns in excess of 20%. As the company's largest shareholder, I have invested interest in going after only the highest value projects that would maximize shareholder returns. Point 4, return of capital to shareholders through growing annual dividends. It gives me great pleasure to announce that our Board of Directors has approved an increase of our recurring quarterly dividend for 2013 by 40% to $0.35 per share per quarter or $1.40 per year. Let me add that we have every intention of increasing the dividend in the years ahead as our business and cash flows continue to grow.
I can only say one thing about that, Double dividend. Lastly, I wanted to point out and answer that the customer has great value to the people of the community may not have been focusing on all the time, our retail mall business. It generated over $100,000,000 in revenue at 84% margin. In this quarter alone, that's a 16.9% increase 16.9% increase over the result from a year ago. We believe that our retail assets are among the most valuable in the world and that cap rates for similar assets in Asia could easily approach between $9,000,000,000 to $10,000,000,000 in value, and that's not including additional retail we're going to put in, in lot 3.
More retail that we put in, in Cote d'Ivo Centro. And as I said in my previous call that we've approached in the government to turn the tropical garden into the tropical garden mall of designs indicate potential of $800,000 So, that's a trigger we could pull at any time to fill our companies and an important part of our fundamental business strategy. With these proceeds, we could easily wipe out all of our debt easily without building any new deals than what we have today. In closing, our financial strength and strength of cash flow are evident in our results. As we have said in the past, our cash flows and balance sheet strength will allow us to both increase our return of cash to shareholders and retain ample liquidity to invest in future growth opportunities, both in our current markets and in other emerging jurisdictions around the globe.
With our strategic positioning and the strong experienced leadership team we have in place to execute our strategy, I couldn't be more optimistic about the future. I hope I made my point with emphasis on our 4 components of future growth, but let me be crystal clear. We will always be a growth captain. Now to Mike, let me turn the call over to Mike and the rest of his call.
Thank you, Sheldon. In the interest of time, I'll take a few minutes to add some specific additional color on our developments of the situation in Singapore, Las Vegas and Bethlehem markets. Rob will cover Macau and Ken will cover the earnings and balance sheet. Let's talk about a little more details development strategies and where we are as we continue to fill the pipeline with promising development opportunities around the globe. The Parisian Macau, the structure has been submitted to the Macau government, the designs are practically finished and we're ready to go, just awaiting government approval.
As soon as government approval comes, we will put piles in the ground and begin the construction period, which should last a little bit more than 30 months and hope to be open to that property by the end of 'fifteen. We will also reveal to the public all of the designs and the plans when government approval comes. In Asia, outside of Macau, in Japan, we are awaiting legislation, which is supposed to be submitted in April to the Diet. After that, there will be an approval process for a year or maybe 2 as it goes through the Japanese procedures. We are looking at sites in both Osaka and Tokyo, and we continue that investigations and have people hired on the ground working on our behalf.
In Korea, we have met with government officials at the federal government level as well as the city levels in Seoul and Busan, Korea, where we're interested in attractive sites for our business. I want to emphasize in Korea that we have not negotiated tax rates that it is also a must that we have some kind of local play available to us and we expect to have a situation where we have presented a Singapore type of restriction on local play so that we can in fact get into the Korean market. In Vietnam, we have looked at numerous sites in Vietnam. We continue to work with the government there. Our eyes are on Ho Chi Minh City and Hanoi.
Progress is being made. However, there's a longer way to go there at the present time than in the other areas. We've also been on the ground in Taiwan. We are not interested in islands offshore. We are interested in the mainland in Taiwan.
We haven't made much progress there, but there is some interest going forward. In Europe, our operation in Madrid for the Euro Vega Strip continues. We continue to meet with the government. There continued centers in the areas of the tender, the land acquisition as well as the financing. We are expected by the government to present our plans in some detail in early January.
And at that time, we will also have more information on what the legislation is that will be passed in our favor. In North America, we are working with the Ontario Gaming Commission as far as a potential downtown site in Toronto. We have decided on the location. There are lots of things in the way at this point, including the approval of the Toronto City Council. We don't know where that project is going to go at the moment, but we're ready to pursue it as soon as the project is released and our conditions are met.
As Sheldon mentioned, the return on investment is critical, particularly in the North American locations. At the present time, there's lots of talk in New York, particularly in Queens. Rob Goldstein and I have had numerous meetings in that market already, and we are continuing this week I'm sorry, next week to go back to see if that we can pursue an opportunity in that particular area, once again, subject to tax rates, subject to all of the other conditions that would make our products successful. In South America, we have had people on the ground in Brazil, both Sao Paulo and Rio de Janeiro, looking at opportunities there, and we are excited initial investigations in Argentina. So we're very busy.
We have a full development department working in these areas, and we expect that over the next year or 2, many of these situations will come to fruition, either fit our model or will not. And once again, I should emphasize, as Sheldon said,
if it
doesn't meet and if any of these don't meet our return hurdles, we certainly will not pursue it. Let me turn to Singapore for a moment. After unusually rapid ramp up period, our VIP volumes and mass table business have now been stable for over the last four quarters. VIP volumes have been between $11,000,000,000 at the low and $13,000,000,000 at the high and the roll in each of the last four quarters. Mass table revenue has also been steady at between $260,000,000 $280,000,000 over the last 5 quarters.
Slot revenue has decreased by 8% this quarter compared to the same quarter last year because of a decrease in local play. This concerns us and we are putting strategies in place, you'll hear some of this from Rob, in terms of how we can replace that business with additional business that we're after. The hotel room and MICE business have performed exceptionally and are operating at near capacity. There is rarely an empty room in the Marina Bay Sands these days. Retail has also grown meaningfully, and we are in the process of developing additional dining and entertainment offerings in our mall.
Looking ahead, our greatest opportunity for growth lies in attracting new premium mass and VIP customers from outside Singapore. These visitors from around the region, including from Indonesia, Malaysia, Thailand, Mainland China, Hong Kong as well as Japan and Korea will provide the growth. In Las Vegas, our business has been stable. We held very well this quarter and the bright spot in Las Vegas continues to be strong growth in play from Asian visitors to Las Vegas and we have the air capacity to continue that business. We had some group cancellations this last quarter, but the volume of group bookings for 2013 looks quite a bit stronger.
Sands Bethlehem, a simple comment there, continues to grow effectively and we're quite pleased with Sands Bethlehem. As a matter of fact, during the recent storm, Sands Bethlehem's electronic capability was still on board because of the generators that we had in place. And we actually sold out in the hotel to the last 4 nights and one of the few places in Bethlehem that had power. Before I turn it over to Ken, I want to give a special thanks to Ed Tracey and his team at Sands China. In the last few months, we have opened 4,000 rooms, 3 hotels, 2 casinos, numerous food and beverage and retail facilities and meeting facilities in a situation where employment is full, Macau runs a 2% employment rate, and I want to commend those people for the great job they've done in getting us to date.
Plenty of growth to come, but the openings have been superb. And with that, I'd like to turn it over to Ken to take you through some of the financial situations. We look forward to your questions. Thanks, Mike. Revenue expanded 12.5% despite low hold in Singapore.
Hold adjusted property EBITDA was $950,700,000 down a little less than 1% compared to the quarter last year. Our strong growth in Macau was offset by a smaller contribution from the VIP business in Singapore compared to last year. Our hold adjusted EBITDA margin of 34% remains healthy and reflects our higher market share in Macau of lower margin VIP business. We expect hold adjusted EBITDA margin to expand as our mix of mass and non gaming revenues in Macau grows with the ramp up of Sands Cotai Central. Old adjusted diluted earnings per share was $0.53 down 0 point 0 $6 from last year's Q3.
The decrease in earnings per share was driven by depreciation and amortization expense related to the opening of Sans Cote Central, higher minority interests and increased share count. Lower EBITDA had a $0.01 unfavorable impact, but was entirely offset by the favorable impact of lower interest expense, income taxes and other items. Our cash balance at September 30 was $3,750,000,000 Our trailing 12 months EBITDA was also $3,750,000,000 and our net debt is approximately $5,700,000,000 Our debt outstanding is both long dated and cost effective with only approximately $100,000,000 coming due in the remainder of 20122013 and at an average borrowing rate of approximately 2.9% this quarter. Our net debt to EBITDA on a consolidated basis is approximately 1.5 times. This is a very comfortable position for us and supports the decision to increase our recurring dividend by 40% for 2013, while retaining ample resources and liquidity to pursue future growth opportunities.
Looking ahead, we would be very comfortable with a net leverage ratio of up to 3x to 3.5x if we were fortunate enough to have several integrated resort projects in development simultaneously. As those projects come online and begin to generate cash flow, the ratio would naturally decrease. So again, our strong balance sheet gives us tremendous flexibility. We maintain the flexibility to utilize additional strategies to enhance shareholder returns in the future. The Board focused principally on increasing the recurring dividend at the last meeting.
Share buybacks and special dividends will continue to be on the potential list of future alternatives, but will be weighed against the requirements for future investments in growth. And with that, I'll turn the call over to Rob. Thanks, Ken. In Macau, we're generating exceptional growth momentum in every gaming segment, mass tables, slots and ETGs and well VIP. Were earning $8,700 per table per day versus $6,900 in last year's numbers in the mass tables segment.
The additional hotel inventory of 1800 Sheraton rooms came online in September and an additional 2,000 rooms will come on board early next year and they should boost our growth as well. Slot and ETG volume was up 29.4% this quarter. Rolling volumes were up 45.5 percent, while the total VIP market Macao was flat. Our mass table revenue, including stadium style ETGs, increased 48 plus percent in the quarter to reach a record $669,000,000 and that represents a market share of 26.4% of the most important segment in the Macao market from our perspective. If you look at mass table, slot and ETG win, together, we're winning $8,500,000 at stake in the 3rd quarter across our property portfolio, which is up about 35% from a year ago.
We are the market leader in mass wind per day. So looking ahead, we expect the lion's share of market share growth to occur in Cotai with the majority of the market's sleeping rooms, shopping, dining, entertainment amenities are located. We should be a primary beneficiary of that growth. The ramp at Sands Cotai Central is visible in our results today. Our mass table win our mass win per day increased 15% in this quarter compared to the April through June 30 period.
Our rolling volume per day increased over 13% in the September quarter compared to the June quarter. Our hotel occupancy is also strong during the quarter and has continued to ramp during the current Q4. Operator, can we have the first question, please? Operator,
we're ready to start the Q and A session now.
Your first question comes from Mark Strawn from Morgan Stanley.
Hi, good afternoon. Rob, you mentioned some initiatives you're undertaking in both Macao and Singapore to reaccelerate same store growth in those markets. With same store growth in Macao flattish and turning negative in Singapore over the last 2Qs, where do you think that those kind of same store growth rates can go over the next couple of quarters? And what are the real key initiatives you're putting in place that will drive those levels? Yes.
Mark, let's start with our strength. Our strength is in the Cal. I guess, we look at the portfolio now as opposed to individual properties. The way I view this thing is a market for us and a portfolio market versus Four Seasons versus Venetian versus Cotai. I think what's happened here is, as you know, the mass revenues are booming there in Macao.
I mean, think about $8,500,000 a day of more 45% margin business, pretty extraordinary. I think we'll continue to accelerate for the simple reason of capacity, hotel sleeping rooms and retail. Once that bridge is completed in December, I think we ended up putting a 9,000 room hotel on Cotai. I can't imagine we're not going to do a whole lot more than continue what we're doing now, which is fill the hotel room, it's fill the retail and watch the market share increase. I think David Sisk has to be singled out for you.
He's on the junket segment. We were, as you know, a few short years ago, non competitive in that segment and now we're very comfortable we're going with that. But the real story, Macao, as everyone is aware of is the mass table side and mass and ETGs and slots. We just see ourselves growing, getting more share by the quarter and couldn't be more pleased we're heading there. Same store sales, I rather speak to same portfolio sales.
I think they're going to be double digit from our perspective on the mass side. Singapore is a different story. As you know, we are flat in the VIP segment the last four quarters. We had exceptional year on year quarter last year. That business is no longer there.
VIP is a challenge today on the growth story because we've seen ourselves softening up. We have increased our event side significantly starting this quarter. We still hit a very, very strong event last week and again this week. We're doing more special events at the high end targeting the rolling customer. The obvious challenge here, as you can see from the numbers, is on the mass slot and table side.
Singapore has been a growth story at 4 to 2 well, it started at 2, 3 a day and went as high as 4, 5 a day since we opened. That is the challenge. I think Mike, I think Sheldon both referenced, we have a very different approach there and that's going to be targeting premium mass customers, not rolling customers, but $10,000 $20,000 customers from Jakarta, KL, Bangkok, Tokyo, Seoul, etcetera. We're putting a team on the ground and incentives on the ground to try to drive more of that premium mass customer into Singapore, more tourist driven. And we think it's going to be very successful.
We have started that a few months ago. We're really putting a lot of boots on the ground. And our belief is that's the growth in Singapore in the near future. Thanks. That's helpful.
One follow-up on Macau. Any update on when you think you'll get the additional tables at Cotai Central? And if and when you get those, you plan to move tables back to the existing properties there? Mike just came back and he believes January is the right date for the additional tables on Cotai. What we continue to do and I think Ed and David and that team is every day is examining the highest yield per table, be it Cotai or Venetian.
We have a good problem. We have a lot of business over there. And even downtown, even on the old sands continues to do some pretty good numbers. So our goal is to maximize yield per table, profitability per table regardless of the hotel it's in. And as you see Cotai ramping up our dilemma, it's a wonderful dilemma is can we get to $10,000,000 $11,000,000 $12,000,000 a day of table ETG wins.
So our goal is not to identify a property, but whatever whether that table performs best, that's where it will go.
Great. Thank you.
Thanks, Mark.
Your next question comes from Joe Greff from JPMorgan.
Hello everyone. Just one follow-up question on Singapore. How much of the declines in rolling ship volume in Singapore would you say is intentional or by design just as a proactive way of maybe managing credit risk and being careful with extension of credit versus it being more of a demand related issue?
Unfortunately, we're fortunate, depending on your perspective, we're not managing it to go down, we're trying to manage it up. And we just the demand on the back end, consumer demand was softer, it has stayed in the $11,000,000,000 $12,000,000,000 per quarter range. I'd love to say go back to $16,000,000 Obviously, we're managing our reserve more aggressively looking at aging of our accounts. But it wasn't by design that the demand was soft. It was by customer demand or lack thereof.
So we'd love to go back to a $15,000,000,000 $6,000,000 our goal is to get back to $15,000,000,000 $16,000,000,000 roll quarters and collect the money as well. But it wasn't it was consumer demand.
When you look back at the Q3 by month and maybe what you've seen so far in the 4Q, would you say that year over year trend that's negative on a year over year basis that it's stabilized or has it bottomed? Are you seeing any degree of improvement or stabilization?
I think it stayed pretty flat. I mean, if you look at Q2 of 'twelve, we did 11.5 to 11.8 this time. We had that exceptional Q3 11 at $16,700,000,000 But unfortunately or fortunately, it depends on your perspective, Singapore looks like a $45,000,000,000 to $50,000,000,000 annualized roll market at this time. I mentioned earlier, we want to be much more aggressive on the event side doing some very strong special events to drive that, but the margin content as well. We don't fear the credit side.
We just would like to see more demand of the right kinds of customers. So but our biggest challenge very candidly is going to make sure that premium mass growth returns again. That's the margin 65 plus percent we'd like to get back to. And that's the segment where we're focusing as far as we think there's short term appreciation, I hope.
This is Sheldon, Joe. What I want to say is that the VIP market out of China is repeatedly slowing down in Macao, although we're not experiencing that. But again, we have a pretty big good front end of the year. I think the same thing is happening in Singapore that the Chinese averse to uncertainty. They don't know what's going to happen when the new government comes in either this month or next month or before the end of the year.
And so their issue of uncertainty will be resolved if people go back to their normal habits. I, for 1, having discussed this with Chinese people and their behavior, Everybody said everybody I've talked to says the same thing. They lie low where there's uncertainty and they become more high profile when they uncertainty. And the uncertainty the only uncertainty that people can look at is from their own internal viewpoints in the PRC, how is the new government going to treat that. And once those issues are moving to the middle sector column, I think we'll see a lot more VIP business coming back.
Great. Thank you, Sheldon. Sheldon, the last few conference calls, you've spoken more and more about retail small profitability and we've seen some improving trends there. What are your thoughts on I guess as it relates more to Macau, what are your current thoughts on monetizing that whether selling part of it or spinning out part of it via an equity spin. How do you look at monetizing?
Because you do look at these very low cap rates and you're probably not getting that equity value currently. And if you were to monetize it, you certainly could demonstrate those low cap rates out there.
It's a very grueling, enticing and stimulating matter. I mean, I've been saying that our business model is unlike any other business model in any portion of the hospitality retail business ever. Mill based non core assets which seldom repaid for the entire cost, We've got about $10,000,000,000 today. And I'm not going to sell Macau until we finish the bridge, which is next month in December. And we let it that the cross traffic.
It's a unique bridge. It's not like the bridges in Las Vegas, where they're outdoors, they're exposed to the weather. This is fully covered, fully enclosed, fully air conditioned and fully equipped with people movements, moving sidewalks. People in market opinion, it's just going to go up there just for the experience of going on over the bridge on moving sidewalks. So, we'll see how that impacts it.
If it does impact it well, I think we could probably reach another billion or maybe more. But we're looking at whether or not we should turn that over now, or we I mean, in terms of monetizing it, or we should wait till we get the approval for the tropical mall and we put the new retail in Lot 3. So we're still in the mix of that. In any event, this is a good time. It's a good cap rate.
I remember the time there wasn't a good cap rate. And we just haven't we haven't focused on that so much because from my standpoint, I focus on development and strategy. And so I came up with the idea to do the 800,000 square foot mall. That will add a couple or a few $1,000,000,000 So it won't hurt to just keeping development. So all we know is that, that money is out there to be gotten without any interest.
So it feels very good to have that cushion.
We also have 26 more stores opening in the Four Seasons, 43 more stores opening and 5 in Cotai Central. And as Sheldon said, the potential of an 800,000 square foot 300 store mall next to the Sheridan on the tropical garden space. So there's a lot more retail to mature for us to essentially maximize that retail facility. And at the new stores in The Venetian will and the Four Seasons will open in November of this year, actually next month.
Thank you.
Your next question comes from Shaun Kelley from Bank of America.
Hi, good afternoon everyone. I just wanted to ask a little bit more about the ramp up at Cotai Central. It looks like obviously from the market share statistics that some of us see that the debut so far since September 20 has been looks like it's starting to be a little bit more successful. Rob, could you just give us a little bit of your thoughts in terms of how you guys beginning to utilize some of the hotel rooms? How you feel about the gaming side?
Is it mass or is it VIP that you're attracting into Phase 2? And then lastly, what you think about margins at that property because they were down a little bit sequentially, but I imagine they can be a lot higher over time?
Yes. I guess, Sean, the way I look at the properties, first of all, we're very happy with the junket segment. I couldn't be happy with what's happening with junkets side. The team there, that segment is cruising very, very well. And we to be blunt about it, we're surprised at how well it does so quickly out of the box.
We have growth opportunity. That's our weakest performer right now on the mass table side. And part of the reason why is The Venetian is so damn strong. So it's, of course, the Four Seasons, although much smaller offering at tables. But I think our growth potential, both from a margin and EBITDA perspective, emanates from the ramp as we use more hotel rooms, the retail gets opened as we get up to a $10,000 our goal is $10,000 win premium per day like the Venetian did this quarter.
If we get there, you're going to see the Sam's coat type sensual, I believe, is the open mass product built in that market. What they've done in the junket segment surprisingly how well it's doing. So if they get the mass table went up to 10,000 a day, get all the ETGs pumped up, that's where the growth opportunities are for the Sands Cove is essential to start pushing up against The Venetian in 'thirteen, 'fourteen. The margins will move with the mass, Let's be honest, 10%, 11% junket segment is still challenging on the margin side. The ETGs in that building along with the slots, it had a slow start.
It's all coming together. And as we get the mass the premium mass side cranking and we get all the rooms open in early Q1 of next year and that bridge gets complete, I don't think there's any reason to doubt that this property should be $1,000,000,000 property on the road. I feel wildly confident. It's the right property for the market in Macau today, lots of sleeping rooms, lots of retail, lots of food, a great gaming floor. I feel, while they always felt confident that the Sands Cove Tysensch would rival the niche once it's fully operational.
That's really helpful, Rob. And then I guess secondarily, I'd just like to ask a little bit about the dividend announcement. So we've obviously very good feedback and it looks like depending upon where the stock opens tomorrow, it'd be right around a 3% yield. Ken, could you talk a little bit about just what you'd be comfortable with in terms of a payout ratio over time? And just kind of any additional color on how much we could think about potentially increasing that with possible double digit percentage increases be on the table in the future?
That would be helpful for investors. Thanks.
A little bit of a loaded question there. I appreciate that. So I think what I can tell you is when we went through the We already snuffled fish. Exactly. And so when we went through the deliberations on the dividend, we were really trying to focus in on kind of rightsizing the dividend and getting it to around a 3% yield, which is what you articulated.
And that's really where the lion's share of the discussion focused in on. I think depending on what conditions are going forward, our focus is obviously on increasing that over time. So as what the percentage of increase is, it really is a function of what we feel is the right size dividend and at that point in time that that decision is made. But that's the way we look at it more so than really on a payout ratio because we've also got to take into account kind of what the horizon looks like from investments in future growth. And so we have to factor that in and make sure we're in a balanced situation.
But for right now, the right size of the dividend we felt was a 3%, and that's where we generated the increase of 40% to get to.
Great. Thanks a lot.
Your next question comes from Felicia Hendrix of Barclays. Hi, good afternoon everybody. Rob, you guys have given us a lot of detail and we really appreciate that. And clearly, the quarter was affected by hold and even adjusting for that though in the provision in Singapore, you did come in a little bit below our property EBITDA forecast. So I'm just wondering on a hold adjusted basis, were there any properties you talked about Sands Cotai, what's going on there, but were there any other properties where you might have expected to see better flow through?
You're talking not in Singapore, but Macau?
Well, just no, in general.
Obviously, I mean the Sands Cotai numbers are good, but they can be better again as the margins are hurting a bit due to the premium mass, a lack of premium mass. But think The Venetian did very, very well. The Four Seasons, it's a junket driven property, so it's always got that challenge. But no, I think the sand in downtown was great. Obviously, the large reserve in MBS hurt us, but that's just a recognition of the aging of some of the accounts.
But now overall, I think it's all there to see. We laid it all out for you, so I can't have much color to that.
Okay. And then actually just touched on something else. What was the percentage of direct play at Four Seasons in the quarter versus last year at this time in Q3?
Direct play being defined as direct junket play or I mean as our direct business?
Your direct business.
Let's take a look here. We would let's see. We were down a bit. We are growing volume this quarter of 1.461 versus 1.507%. We held light 2.69% versus last year's I'm seeing if I'm looking at Q2.
So Q3 'eleven, we were at $1,570,000 versus $1,461,000 on the rolling volume. We held 4.39 last year versus 2.6 She's looking at
the difference between the jacket business and the premium direct business.
Is that right? I'm trying to give you the premium direct or the junket? Yes.
What percentage of your overall VIP play was your direct generated play?
Overall business, it's much it's mostly 7.5 rolling on the VIP junket versus 1.461 on the direct.
Okay.
So the lion's share, obviously, the VIP junket.
That's the plus. It's much higher at dividend.
I was
just asking at the 4 seasons.
Yes. 7.5 versus 1.4 and we held last the hold is obviously in 3Q 2011, we held 2 versus 2.56% this year.
Right.
So it was about 16% in terms of the premium direct percentage.
And Ken, what was it last year?
Hold on a second, I'll tell you.
I'll be on there because we $72,000,000 versus $72,000,000 it won $52,000,000 for Q3 'eleven. It's about 37%, yes. Versus $59,000,000 because of Yes, it's about 37%.
Okay, okay. Thank you.
As well as we have a junket segment.
Yes, that's correct. I just am trying to figure out where the disparity was with our numbers. And then is it Sheldon, is it a little too early regarding the Parisian to talk about the incremental number of tables you think you might get there?
Well, I can only quote what the government has said publicly. No. No, I don't want to talk about what they say, by the way. We've asked for the minimum that we think we need to open Lot 3, but then I see other people getting more. The government has said that they've indicated publicly that they will give more tables to the people who are building more non gaming.
They're not going to allow the total space to the matrix to come down to 25% casino and 75% non GAAP. They want it down to 10% or less, which means that the guys who are going to build casino and hotel and a couple of restaurants, they're not going to get very many tables. They only have like 2,000 tables to give out. I don't think it would be surprising for them to say the guys who build 25% or more of casino will get the same number of tables, the people who build 10% or less. Our business model says that we build actually, we have the largest casino in the world in the Venetian Macau, and it's only 4.5% of the total amount of space.
And all of our plans for all of the lots on the Cotai strip would have amounted to if we were able to build them all 2.5% of total. So we're setting the precedent to how they're going to do it. So in our case, I'm pretty sure that if the government follows what it said publicly, that we'll get at least a number of tables we asked for. I've since increased that because publicly I've increased it to 500, but we could live with 450 because the other guy is saying, Ed Chan says, oh, they want $600,000,000 and NPL says they want $500,000,000 and but they're not going to build the entertainment, the shopping, the MICE space in particular. And as you know, we focus a lot on MICE space.
So they want people that are they're going to give the tables to the people they say that are contributing more to the leisure of the business travel objectives.
Your next question comes from the line of John Oh from CLSA.
Hi. Thank you, everyone. Rob, if you could just give us a quick sense of your strategy in Macau and the premium mass market segment? Could you quantify for us how big is the opportunity today? Maybe give us a sense of how much of your mass market today would you classify as premium mass market?
And maybe give us a roadmap as to how much bigger you think it could be specifically for CoreSite Central?
Hey, John. I think let's be honest, we are trying I'm trying to estimate much. Yes. That's a simple one. John, the way we view this is we're in a different place than anybody else, because we have 3 distinct segments.
We've got super premium, which DABEL is winning $20,000 plus a day, probably that's less than 5% portfolio, 15% would probably be devoted to, I'll call, premium mass and the lion's share, the bulk would be in the pure mass business. But we're a unique place, let's be frank. We've got more capacity than anybody else by a lot. We've got more sleeping rooms, more retail, more food. So the way I view this is, it's probably the single greatest opportunity I've ever seen in any market anywhere.
I can see a day when if we're able to do at this point 8.5, how big it gets depends on obviously if we're going to grow faster than anybody because we've got the capacity in the sleeping rooms to grow. Our buildings are built for mass, premium mass, super mass. We're very focused on it. We think we've done a terrific job of upping the junket segment, but our focus and our profit margins obviously reside in this segment. I think one of the unique things in our buildings is that we can talk to the customers not betting just a 1,000 Hong Kong a day.
We can talk to people betting less. We can offer things no one else can offer. So we've got a multifaceted strategy to all three segments. But our biggest single opportunity obviously is in those tables that we can drop minimums down and get that customer. We think ETDs are a very important part of that.
How big can it get? John, I don't know. I read your reports and I believe you, I can get very, very, very big. And I think you're right. I think the growth opportunities are enormous for us, because we're in the sweetest part of the market where the margins are 45%, 48%.
I don't I see a day when we can on the ETG slot side surpass $1,000,000,000 not too far down the road. I think mass tables can be staggering. I really do. I mean, in the market, in the mass tables, I think all of us are dumbstruck at how well it's done. But the biggest beneficiary is this company.
And that's where our focus is. And how big can it be? I don't know. I like to believe you're right, it can grow double digit for the foreseeable next 2 years and we're the biggest beneficiary.
But do you currently have That's
our biggest opportunity by far.
Do you currently have any space allocated within Quota Central for you to allocate specifically for premium mass or is that just jumbled within the whole overall mass floor?
No, we have we're reallocating space now, John, up on the top floors as well as rethinking the floor. Ed and David have a very definite strategy to rethink Cotai and Sands Cotai with additional new rooms, these spaces. We are rethinking as we speak because that's where the opportunity for coattiving on $1,000,000,000 property resides.
All right. And just last one for me. For Ken, I guess
John, hang on. Yes.
So that's something. There's a very big space that we want to reallocate for the theater. We've got plenty of room, I think it's 70,000
Theater Box 5, 42 and 30 theater box Sheldon is referencing a theater box 5 in Sands Cove Dicential. It's over 80,000
We have the same box in what was launch 6, which is now the Sheridan line. Correct. We could turn that into mass gaming, mass premium.
We're thinking the floor, John, every which way we can, including the 39th floor of the current building, including Sheldon referenced the theater spaces. We have yes, we have opportunity and we recognize it's going to be right physical space to make it really sing to $10,000 $15,000 per table per day. And I do think with the bridge connecting 9,000 keys, all that retail, I don't think $10,000 across portfolio is that ambitious. I think it's very achievable for us.
No one marketing move we're going to make is forever. The situation is fluid, it's dynamic. We'll try out new things. What used to be high limit is now high limit, Diamond Rubri and has now been retitled at premium mass.
If you look at our space in the Venetian, what Sheldon is referencing, that premium that mass play in The Venetian Ruby Diamond has been exemplary from the day we opened it. It is an extraordinary success story. Look at the Venetian doing $10,000 plus per deal per day currently, where does it go? I don't know. It could be $11,000 $12,000 a day.
Okay, great. A question for Ken. The $1.40 of dividends from LVS, that's a 40% increase in payout, but you have not really made any commitments with on Sands China dividends of $0.58 Hong Kong for every 6 months. How should we go about thinking about that? How are you sourcing that incremental $0.40 per share payout?
Are you taking that from Singapore? And if you are, could you help us think about how should we model the tax implications of that?
Yes, sure. A couple of questions in there. The Sands China Board will need to make a determination as far as what the dividend will be coming out of them for 2013 and that decision hasn't been made yet. But I think if you just look
at it from a cash flow standpoint,
I think the way that I'm kind of thinking about funding the LBS dividend, which is about $1,200,000 a little bit less than I'm sorry, dollars 1,200,000,000 So it's probably close to about $1,000,000,000 coming out of Sands China Limited and that would be net, right, of the minority interest piece that would get paid out. So that $1,000,000,000 would be flowing up approximately from them. And then the balance would be sourced from either cash from Marina Bay Sands or cash that we have either in the U. S. Restricted group or at the parent level.
So that's kind of the way we're thinking about it. No final determination has been made relative to that. And then it's all really any money that we bring up from Sands China Limited or from Marina Bay Sands is very tax efficient, because we would be offsetting any taxes that would be owed on the repatriation of dividends with foreign tax credits that are generated in our Asian activities. And so for all intents and purposes, that money comes up on a tax free basis.
Thank you very much. John, this is Shulman. Obviously, we're going to have to get some money out of SEL and we've got to we've got a share proportionately. And so we've got to the extent that we upstream the amount of money. We just got the okay from the Board day before yesterday.
So we haven't talked to the SCO Board. But obviously, we're going to have to we're going to have to share the good fortune. And by the way, we're happy about that. We get 70.3% of that.
Okay. Thank you.
Your next question comes from the line of Stephen Kent from Goldman Sachs.
Yes. Hi. Could you just discuss the new development opportunities? Maybe Mike, you could speak to what you're envisioning in New York? And then when you talk about the opportunity in Madrid, I guess I'm intrigued because you on your slide you go through 6 steps that you're looking for, but the bottom one is that you need to see some changes in the economic conditions and that almost seems secondary now when I'm looking at the slides versus just a few months ago when that seemed to be more paramount?
Well, I think, Steve, the economic conditions really during the course of this the meetings with the Spanish government and the course of our meetings here, if something would have deteriorated significantly in terms of the euro or what have you, that's just a caveat that we're watching that. This is a process that will go on for a number of months as we go through the process of legislations, final site selection, the tender, land acquisition, etcetera. But if something turns dramatically negative in the short term, that's simply something that we would look at and we want anybody to know that we'd be making a judgment on that basis. So I think that's on the chart just to keep aware that something could happen. We feel good about looking at the investment at the present time and looking at the future.
And basically, if all things come in order, they could all come in order. But if something dramatic happens in the economic environment that causes real concern, we just we very much hesitate to go forward.
But if Spain stays the way it is right now, then you would go forward from an economic perspective?
I think if everything else worked according to our plan, yes.
You have to understand that the one of the biggest triggers in the entire matrix is the fact that we're doing the sensitivity analysis. I don't want to say this publicly, but our gaming tax rate is 1,000,000 over there is going to be significantly lower. So we can make significant adjustments to end up with our EBITDA percentage by the tax rate. We make a 33% EBITDA rate in Macau with the tax rate in the 4 at 40%. We make 50% to 55 percent EBITDA of revenue in Singapore with a much lower tax rate averaging about 15%.
We get below that, which I'm confident we will significantly, and we have certain things to achieve there to get below that, then we don't need anywhere near as much money and by any measure, win per unit per day of either tables or slots. So we might end up with the same amount of money with only 70% of the amount of business that it would take to do that in either of our other locations. So you can't compare apples to apples. They're 2 different calculations.
Okay. And then the commentary on New York.
In New York, basically, Steve, we have been having some conversations about Willard's Point in Queens. We previously have looked at Manhattan. Most of the noise we get in Manhattan is that it won't happen. We think there's a potential there's been some press about Willats Point. We've looked at it, continue to look at it.
We're testing that market and talking to the owners of that situation about that kind of development. And once again, that would very much depend upon what kind of arrangements we could make there as well as what the tax rate would be. And there's lots of rumors and lots of things flying around, But we think that's a viable market, and we're under investigation there now.
Okay. Thank you.
And your last question comes from Carlo Santarelli from Deutsche Bank.
Carlo, are you there? Yes, I'm here. Could you guys hear me? I can hear you. You hear me okay?
Yes. All right. Sorry guys. The question was for Rob. You talked a little bit earlier about your mass business, your premium versus your regular mass and obviously the 45% margins in your regular mass business.
Could you guys maybe quantify a little bit the differences between the margins of that premium mass customer and that regular mass customer to the extent that there are any in Singapore and Macau? I think in Macau, it's not that material, Karl. I think if you think about it, it blends at 44% up to the high 40s. I don't think there's a lot of difference. We're not it's mostly if it's complementary, it's room comps, it's meals, but the spread is not great.
It really isn't. Singapore, I'd say the same. It stays pretty consistent, high 60s, slot ETG, mass table. The margins grow obviously, the wind per table in both markets. So the wind per tables can we're hitting $20,000 per table out of The Venetian in some periods, it may ramp up.
But frankly, there's not a whole lot of spread that I can tell.
Great. Thank you. And then if
I could just ask a follow-up, were there any changes in your provisions this quarter that hampered specifically the Singapore results at all? I'm sorry, I missed the first part. Any changes in your provisions in this period? Yes. Yes.
Quarter over quarter, so Q3 2012 versus Q3 of 20 11, it was about a $15,000,000 increase in receivable provision. Okay.
That's helpful. Thank you very much.
This concludes today's conference call. You may now disconnect.