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Sands China Ltd.
SCL First Quarter 2020 Financial Highlights
The Macao government has announced publicly that total visitation from mainland China to Macao decreased by 14.9% in January 2020 (with an 83.3% decrease in visitation over the first seven days of Chinese New Year), 97.2% in February 2020 and 96.3% in March 2020 as compared to the same periods in 2019. It has also announced that monthly gross gaming revenue decreased by 11.3%, 87.8% and 79.7% in January, February and March 2020, respectively, as compared to the same periods in 2019.
The disruptions arising from the COVID-19 Pandemic had a significant adverse impact on SCL's financial condition and operations during the three months ended March 31, 2020. Net revenues for the three months ended March 31, 2020, totaled $808 million compared to $2.33 billion for the three months ended March 31, 2019, representing a decrease of 65.3%. SCL recorded an operating loss of $133 million and a net loss of $166 million in the first quarter of 2020, as compared to operating income of $624 million and net income of $557 million in the same period in the prior year. Adjusted property EBITDA totaled $67 million in the quarter ended March 31, 2020, as compared to $858 million in the same period in the prior year. As of March 31, 2020, SCL had $814 million of total cash and cash equivalents and $2.0 billion of available borrowing capacity under its revolving unsecured credit facility (the "2018 SCL Revolving Facility").
Current Impact of COVID-19 Pandemic on SCL's Liquidity and Financial Highlights
The Macao government announced publicly that monthly gross gaming revenue and total visitation from mainland China decreased by 96.8% and 99.6%, respectively, in April 2020, as compared to the same period in 2019. SCL net revenues totaled $9 million in April 2020, compared to $700 million in April 2019, representing a decrease of 98.7%. SCL recorded an operating loss of $164 million and a net loss of $180 million in April 2020, as compared to operating income of $166 million and net income of $148 million in the same period in the prior year. Due to the continuing impact of the COVID-19 Pandemic, SCL's financial performance in April 2020 reflects a daily adjusted property EBITDA loss of approximately $3.5 million for an aggregate adjusted property EBITDA loss of approximately $105 million in April 2020, compared to a daily adjusted property EBITDA of approximately $8 million in April 2019 for an aggregate adjusted property EBITDA of approximately $239 million in April 2019. Based on the preliminary information available, net revenues, operating loss, net loss and adjusted property EBITDA loss in May 2020 were not materially different relative to net revenues, operating loss, net loss and adjusted property EBITDA loss, respectively, in April 2020. SCL borrowed an aggregate amount of $404 million under the 2018 SCL Revolving Facility during April and May 2020.
In the current operating environment resulting from the impact of the COVID-19 Pandemic, SCL estimates a monthly run-rate of operating costs of approximately $110 million, development and maintenance capital expenditures of approximately$65 million and approximately $25 million for interest expense. SCL has taken various mitigating measures to manage through the current environment, including a cost reduction program to minimize cash outflow of non-essential items. On April 17, 2020, SCL announced that its Board of Directors resolved not to recommend the payment of a final dividend in respect of the year ended December 31, 2019.
SCL believes it has a strong balance sheet and sufficient liquidity in place to fund its operations for 12 months in the current operating environment. As of May 29, 2020, SCL had total liquidity of $2.41 billion, consisting of $801 million of total cash and cash equivalents and $1.61 billion of available borrowing capacity under the 2018 SCL Revolving Facility. SCL believes it will be able to support its continuing operations, complete the major construction projects that are underway, and respond to the current COVID-19 Pandemic challenges.
The duration and intensity of this global health emergency and related disruptions are uncertain. Given the dynamic nature of these circumstances, the impact on SCL's consolidated results of operations, cash flows and financial condition in 2020 will be material. SCL cannot reasonably estimate the impact at this time. It is unknown when the COVID-19 Pandemic will end, when or how quickly the current travel restrictions will be modified or cease to be necessary and the resulting impact on the willingness of SCL's customers to spend on travel and entertainment.
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