The Asia business of Las Vegas Sands is experiencing growth as the recovery of casinos from Covid-19 accelerates.

• The company reported earnings of 55 cents per share on revenue of $2.8 billion, meeting analyst predictions.
• The recovery of Singapore and Macao from the pandemic is being fueled by the rise in spending on tourism from Chinese tourists.
• The $2 billion share buyback plan marks a change in strategy for returning capital to shareholders.

The recovery from the Covid-19 pandemic is picking up pace, with Asia playing a significant role.

The gambling industry's largest casino company reported a $1.12 billion third-quarter adjusted property EBITDA on Wednesday, which is close to pre-pandemic levels, with only a 6% decrease from the same period in 2019.

Las Vegas Sands reported earnings of 55 cents per share on revenue of $2.8 billion, which was in line with expectations but slightly higher than estimated, according to a survey of analysts by LSEG.

Despite lower visitation, Marina Bay Sands in Singapore has exceeded pre-pandemic levels in gaming, retail shopping, and other spending, with profit margins of over 48%.

Despite a 15% decrease in visitation in Macao compared to pre-pandemic levels, Sands reported a 96% increase in occupancy in the third quarter and customers are spending more per person.

In Macao, mass gaming revenue reached 92% of 2019 third-quarter levels, or $5.1 billion, according to official government numbers. Las Vegas Sands CEO Rob Goldstein predicted on the company's earnings call that the destination could hit $40 billion annually in the near term.

With increasing cashflow, Las Vegas Sands is prioritizing capital expenditures. In Marina Bay Sands, the remodel will result in nearly four times the number of suites, commanding higher prices. In Macao, the second phase of construction begins on The Londoner, the latest addition to the portfolio.

Through 2025, Las Vegas Sands also declared a $2 billion share buyback plan.

Patrick Dumont, Las Vegas Sands President, revealed that the company is now focusing more on buybacks than dividends as its preferred method of returning capital to shareholders, a shift from the approach embraced by his late father-in-law Sheldon Adelson.

According to Goldstein, the shares are being traded as if Covid lockdowns are still in effect. Therefore, when the stock is undervalued, there are buying opportunities, particularly when Sands has $5.6 billion in cash reserves.

Dumont stated that it took a five-year process to transform the company into an investment-grade gaming company, as Bank of America analyst Shaun Kelley remarked during the earnings call, "You're probably the most under-leveraged gaming company I've ever covered."

He stated that it provides access to the world's largest and most liquid debt market due to its efficiency as a capital class.

Dumont stated that the company's investment-grade balance sheet enables them to execute on projects proposed in new jurisdictions, including their efforts to secure a gaming license in New York.