The company faces risks from fluctuating currency exchange rates and interest rates, impacting debt costs. Competition for labor and materials, regulatory changes, and potential litigation (including the ongoing Macao case) pose operational challenges. Debt covenant compliance, particularly regarding leverage ratios, is crucial. Economic downturns, travel disruptions, and the collectability of gaming receivables are also potential risks. The success of new development projects is uncertain.
Financial Upside
Increased visitation and gaming revenue in Macao, driven by relaxed COVID-19 restrictions, are positive signs. Strong liquidity, with $4.21 billion in unrestricted cash, and access to significant borrowing capacity, support operations and development projects. Successful completion of ongoing development projects (e.g., Londoner Macao, Marina Bay Sands Expansion) could generate substantial revenue. Share repurchases and dividend payments are part of a stockholder return strategy.
