Sands China Ltd reports 16.1% Net Income decline and 2.4% Revenue decline
17/02/2017 • About Sands China Ltd (
$1928) • By InTwits
Sands China Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: The company has highly profitable business model: ROIC is at 14.3%.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sands China Ltd ($1928) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,511 | 8,908 | 9,505 | 6,820 | 6,653 | -2.4% |
| SG&A | 391 | 581 | 624 | 559 | | -100.0% |
| EBITDA | 1,629 | 2,796 | 3,150 | 2,053 | 1,962 | -4.4% |
| Net Income | 1,236 | 2,215 | 2,548 | 1,459 | 1,224 | -16.1% |
Balance Sheet
|
|---|
| Cash | 1,948 | 2,943 | 2,535 | 1,283 | 1,284 | 0.1% |
| Short Term Debt | 49 | 207 | 6 | 6 | 26 | 327.8% |
| Long Term Debt | 3,212 | 3,023 | 3,194 | 3,379 | 4,348 | 28.7% |
Cash flow
|
|---|
| Capex | 989 | 601 | 720 | 1,109 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 33.4% | 36.8% | 6.7% | -28.2% | -2.4% | |
| EBITDA growth | 10.5% | 71.6% | 12.7% | -34.8% | -4.4% | |
| EBITDA Margin | 25.0% | 31.4% | 33.1% | 30.1% | 29.5% | -0.6% |
| Net Income Margin | 19.0% | 24.9% | 26.8% | 21.4% | 18.4% | -3.0% |
| SG&A, % of revenue | 6.0% | 6.5% | 6.6% | 8.2% | | -8.2% |
| CAPEX, % of revenue | 15.2% | 6.7% | 7.6% | 16.3% | | -16.3% |
| ROIC | 14.2% | 24.4% | 26.7% | 15.8% | 14.3% | -1.4% |
| ROE | 22.3% | 36.8% | 39.6% | 23.8% | 22.6% | -1.2% |
| Net Debt/EBITDA | 0.8x | 0.1x | 0.2x | 1.0x | 1.6x | 0.6x |
Revenue and profitability
The company's Revenue decreased on 2.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.61 pp from 30.1% to 29.5% in FY2016.
Net Income marign decreased on 3.0 pp from 21.4% to 18.4% in FY2016.
Return on investment
The company operates at high and attractive ROE (22.57%) while ROIC is a bit lower (14.33%). ROIC decreased slightly on 1.4 pp from 15.8% to 14.3% in FY2016. ROE decreased slightly on 1.2 pp from 23.8% to 22.6% in FY2016.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 1.0x to 1.6x in FY2016. Debt jumped on 29.2% while cash showed almost no change in FY2016.
Management team
The company's CEO Sheldon Gary Adelson has spent 3 years at the company.
Appendix 1: Peers in Lodging
Below you can find Sands China Ltd benchmarking vs. other companies in Lodging industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China New City Commercial Development Ltd ($1321) | -16.9% | 433.0% | -76.2% | 141.3% | |
| Zhuhai Holdings Investment Group Ltd ($908) | 229.8% | 14.5% | 57.0% | 76.3% | |
| Shanghai Jin Jiang International Hotels Group Co Ltd ($2006) | -28.8% | 3.2% | 0.8% | 29.9% | |
| Century City International Holdings Ltd ($355) | 283.6% | 108.7% | -35.8% | 25.9% | |
| Far East Consortium International Ltd/HK ($35) | | 111.9% | 9.0% | 25.7% | -21.8% |
| |
|---|
| Median (23 companies) | 9.8% | 10.2% | 0.7% | -3.5% | -5.4% |
|---|
| Sands China Ltd ($1928) | | 36.8% | 6.7% | -28.2% | -2.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SJM Holdings Ltd ($880) | 99.7% | 99.7% | 99.7% | 99.5% | |
| Wynn Macau Ltd ($1128) | 97.9% | 98.3% | 98.5% | 98.4% | |
| Emperor Entertainment Hotel Ltd ($296) | 77.1% | 75.6% | 76.8% | 70.9% | 65.5% |
| Asia Standard Hotel Group Ltd ($292) | 60.7% | 73.4% | 72.1% | 67.6% | 65.8% |
| Sino Hotels Holdings Ltd ($1221) | 71.3% | 70.4% | 68.9% | 65.8% | 62.0% |
| |
|---|
| Median (18 companies) | 56.4% | 51.1% | 51.7% | 48.6% | 62.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NagaCorp Ltd ($3918) | 49.8% | 50.1% | 42.8% | 45.3% | 48.1% |
| Emperor Entertainment Hotel Ltd ($296) | 44.9% | 46.4% | 46.9% | 43.1% | 36.2% |
| Jinmao Investments and Jinmao China Investments Holdings Ltd ($6139) | 41.2% | 40.5% | 25.8% | 41.5% | |
| Asia Standard Hotel Group Ltd ($292) | -23.9% | 65.2% | 49.9% | 40.4% | 17.8% |
| Sino Hotels Holdings Ltd ($1221) | 46.5% | 45.9% | 43.1% | 39.6% | 33.1% |
| |
|---|
| Median (23 companies) | 26.8% | 26.4% | 25.8% | 22.6% | 29.5% |
|---|
| Sands China Ltd ($1928) | 25.0% | 31.4% | 33.1% | 30.1% | 29.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Macau Legend Development Ltd ($1680) | 5.0% | 24.2% | 73.0% | 68.5% | |
| Wynn Macau Ltd ($1128) | 5.2% | 11.0% | 28.2% | 66.6% | |
| Legend Strategy International Holdings Group Co Ltd ($1355) | 17.0% | 38.0% | 1.2% | 62.6% | |
| Century City International Holdings Ltd ($355) | 21.2% | 32.9% | 13.4% | 35.8% | |
| Shangri-La Asia Ltd ($69) | 48.5% | 33.1% | 41.2% | 34.3% | |
| |
|---|
| Median (23 companies) | 6.3% | 11.0% | 13.2% | 12.8% | 10.3% |
|---|
| Sands China Ltd ($1928) | 15.2% | 6.7% | 7.6% | 16.3% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NagaCorp Ltd ($3918) | 30.6% | 28.9% | 22.6% | 28.6% | 21.3% |
| MGM China Holdings Ltd ($2282) | 46.2% | 53.8% | 54.5% | 24.0% | 16.0% |
| Emperor Entertainment Hotel Ltd ($296) | 22.2% | 21.1% | 18.4% | 12.0% | 7.5% |
| Galaxy Entertainment Group Ltd ($27) | 25.2% | 30.0% | 27.5% | 10.2% | |
| Wynn Macau Ltd ($1128) | 53.9% | 42.3% | 29.9% | 9.9% | |
| |
|---|
| Median (23 companies) | 5.7% | 5.6% | 3.6% | 2.7% | 4.8% |
|---|
| Sands China Ltd ($1928) | 14.2% | 24.4% | 26.7% | 15.8% | 14.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China New City Commercial Development Ltd ($1321) | 26.0x | 7.9x | | 100.1x | |
| Century City International Holdings Ltd ($355) | 6.5x | 9.3x | 11.2x | 12.3x | |
| Regal Hotels International Holdings Ltd ($78) | 5.0x | 8.7x | 11.8x | 11.1x | |
| Shangri-La Asia Ltd ($69) | 6.0x | 6.8x | 6.9x | 9.8x | |
| Macau Legend Development Ltd ($1680) | 2.2x | 0.6x | 0.2x | 7.1x | |
| |
|---|
| Median (21 companies) | 1.0x | 0.8x | 1.0x | 4.0x | 2.6x |
|---|
| Sands China Ltd ($1928) | 0.8x | 0.1x | 0.2x | 1.0x | 1.6x |
