Earnings Call Transcript - LVS Q1 2024

Operator, Operator

Good day, ladies and gentlemen, and welcome to the Sands' First Quarter 2024 Earnings Call. At this time, all participants have been placed on a listen-only mode. We will open the floor for your questions and comments following the presentation. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Daniel Briggs, Senior Vice President of Investor Relations

Thank you, Paul. Joining the call today are Rob Goldstein, our Chairman and CEO; Patrick Dumont, our President and COO; Dr. Wilfred Wong, Executive Vice Chairman of Sands China; and Grant Chum, CEO and President of Sands China and EVP of Asia Operations. Today's conference call will contain forward-looking statements. We will be making these statements under the safe harbor provision of Federal Securities laws. The Company's actual results may differ materially from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP financial measure are included in our press release. We have posted an earnings presentation on our website. We will refer to that presentation during the call. Finally, for the Q&A session, we ask those interested to please pose one question and one follow-up so we might allow everyone with interest the opportunity to participate. This presentation is being recorded. I'll now turn the call over to Rob.

Robert Goldstein, Chairman and CEO

Thanks, Dan, and thanks for joining us today. The Macao market continues to grow as it has over the past five quarters. Since the reopening in early 2023, the annual run rate of the market has grown every quarter from $17 billion in Q1 of last year to $22 billion, then $24 billion and $26 billion, now reaching $28 billion in annualized gaming revenue. We remain confident—fully confident—in the future growth of the Macao market. I've said in the past, the Macao market will grow to $30 billion, and then $35 billion, and then $40 billion beyond in the years ahead; I remain steadfast in my belief. We are equally confident in our business strategy to invest in both the quality and scale of our market-leading assets in Macao. Our capital investment programs ensure that we will continue to be the market leader in the years ahead. Our investments position us to grow faster than the market over the long term, to increase our share of EBITDA in the market, and to generate industry-leading returns on invested capital. Turning to our current financial results for Macao, we delivered a solid result for the quarter despite the disruption from our ongoing capital investment programs. SCL continues to lead the market in gaming and non-gaming revenue and, most importantly, in market share of EBITDA. Because of our market-leading investments, we will capture high-value, high-margin tourism over the long run. We have a unique competitive position in terms of scale, quality, and diversity of product offerings. Upon completion of the second phase of the London and our co-tying redevelopment program, our product advantage will be more substantial than ever. Turning to Singapore, we delivered a record quarter. We believe it's a record for the industry. The team there has done an extraordinary job, and this is what happens when a superior product is located in the proper market. Our financial results in Singapore reflect the impact of our capital investment programs and our service capabilities. The appeal of Singapore as a tourist destination and the robust entertainment and lifestyle event calendar also contributed to the growth at MBS. As we complete the balance of our investment programs, there will be much more runway for growth in the future. Thanks for joining us today. I'll turn it over to Patrick for more details.

Patrick Dumont, President and COO

Thanks, Rob. Macao EBITDA was $610 million. If we had held as expected in our rolling program, our EBITDA would have been higher by $31 million. When adjusted for lower-than-expected holds in the rolling segment, our EBITDA margin would have been 34.4%, or up 380 basis points compared to the first quarter of 2023. This highlights our focus on cost discipline and profitability. The ongoing capital investment programs at The Londoner and the Cotai Arena impacted our results this quarter. The Cotai Arena was closed for renovation in January this year. After the significant reinvestment and renovation, the arena is expected to reopen in November. In terms of the second phase of the Londoner, we have now commenced the room renovation on the first Sheraton. We plan to complete the first tower by year-end and the second tower by Golden Week in May of 2025. The renovation of the casino on the Sheraton side of London will commence in May of this year, with the reopening scheduled for December of 2024. While there will be ongoing disruption from these capital projects, as these products come online between the end of '24 and the first half of '25, our competitive position will be stronger than ever. The scale, quality, and diversity of the product will be better than we have ever offered before. Turning to Singapore, MBS and EBITDA came in at $597 million, an all-time record for the property and the industry. Our strong results reflect the impact of high-quality investment and market-leading products. Had we held as expected in our Rolling Play segment, EBITDA would have been $77 million lower. Had we held as expected in the Rolling Play segment, MBS EBITDA margin would have been 49.1%, or 180 basis points higher than in Q1 of 2023. We have now completed both Tower 1 and Tower 2 of the Marina Bay Sands hotel refurbishment. While we have substantially completed the original $1 billion capital expenditure program, we are still in the initial stages of realizing the benefits of these new products. We have now commenced the next phase of our capital investment program at Marina Bay Sands. The $750 million renovation, which includes Tower 3, is scheduled to be completed by the second quarter of next year. This will support further growth in 2025 and beyond. Turning to our program to return capital to shareholders, we repurchased $450 million of LVS stock during the quarter. We also paid our recurring quarterly dividend. In addition, LVS has completed the previously announced purchase of $250 million of SCL stock, which increases the parent company's ownership interest in SCL to approximately 71%. We continue to see value in both repurchasing LVS stock and increasing our ownership interest in SCL. We look forward to continuing to utilize the company's capital return program to increase returns to shareholders in the future. Thanks again for joining the call today. Now, let's take some questions.

Operator, Operator

Thank you. Ladies and gentlemen, the floor is now open for questions. The first question today is from Stephen Grambling at Morgan Stanley. Stephen, your line is live.

Stephen Grambling, Analyst

Hey, thanks so much. You talked to the March highs for the market in Macau, but this quarter looks like the margin flow-through and EBITDA actually went in the other direction. How should we be thinking about flow-through in Macau and operating expenses going forward in that market?

Patrick Dumont, President and COO

Yeah. I just want to say one thing before we turn it over to Grant. I think some of this has to do in Macau with some of the disruption that we experienced during the quarter. So when we took the arena offline in January, we lost the benefit of our entertainment programs during a peak period. That did have an impact. So when you look at our operation, you compare it to Q1 of last year, Q1 of last year, we were coming out of the pandemic and it really took a while for visitation to get started again. This year, unfortunately, we caused some of this disruption ourselves. As we've started renovating our arena, it's a very powerful asset that has a lot of entertainment, and we went through the Chinese New Year period. Unfortunately, with some hotel rooms out and the arena out, we felt the impact on the revenue side. So as we've said before, as the market continues to grow, we will do well. We have the best product. We've invested the most in non-gaming assets. We have the most amenities to offer to our patrons, and they're very high quality, with a diversity of retail, food and beverage, and entertainment. Unfortunately, we didn't have all of that available this quarter. We only had the London arena, which is good, but it can't compete with the Cotai Arena. So I think for us, as the revenues continue to grow, as you've seen in prior quarters, our margins will align positively. You see that in the Venetian, as the revenues are where they need to be, the margins align as well. So that's sort of the headline from the margin performance this quarter. I do want to turn it over to Grant to see if he has any additional color.

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

Yeah. Thanks, Patrick. I think the most important point is still the GGR is growing in the market. And if you look at our profitability, at this level of GGR, we should be looking at low to mid-30s in operating margin—EBITDA margin, and we're right at the high end of that range there. Obviously, each quarter there's seasonality relating to different parts of the business, revenue mix. So first quarter, I think 34.4% in terms of underlying margin is a really good number. I think 2024 is going to be one that is impacted by our capital works and the renovations that Patrick referenced in his opening remarks. We have obviously started the hotel renovation in the first half of Sheraton, and we're probably down about 500, 600 rooms in the first quarter on average in that hotel. But the number of keys taken out of inventory will increase further in the second and third quarters. And of course, Cotai Arena, as Patrick referenced, has always been a core part of our content programming and offering. While we were able to offer plenty of shows at the London Arena, if you compare just the sheer number of shows that we had in the first quarter, we had 12 shows compared to 31 shows in the fourth quarter last year. It's a big difference. In addition, the attendance per show was significantly higher in the fourth quarter as well. Hopefully, that gives you some color regarding the disruption that had an effect on our business with the arena being closed for renovation. As I said, the hotel renovation is ongoing, and you're going to see more keys out of inventory in the next couple of quarters.

Stephen Grambling, Analyst

Got it. And maybe one clarification. I guess in the quarter, industry-wide, I'm not sure, maybe I missed this in the presentation or I haven't seen the slides, but is VIP—the VIP actually grew faster than mass overall in the first quarter for the industry? And how are you thinking about base mass versus premium mass from here? I know you kind of touched on this a little bit, but would be curious about the industry-wide thought process.

Patrick Dumont, President and COO

Rob, should I take that?

Robert Goldstein, Chairman and CEO

Yes. Yes, please.

Patrick Dumont, President and COO

Yes, you're right. I think if you look at our slides, the mass revenues sequentially would be around 4%, and the overall GGR for the quarter grew at 6% sequentially. So yes, the VIP revenues in the market as a whole grew faster than the mass revenues quarter-on-quarter. I think in terms of the premium mass versus base mass, again, I think you can see it from our slides. Premium mass grew slightly faster for us in this quarter, but the difference is not material when you account for things like hold percentage and patron counts and so forth. So I wouldn't say there's a material divergence in the growth rates between premium mass and base mass, and it's part of business for the quarter.

Robert Goldstein, Chairman and CEO

I think it's important to note that visitation still isn't what it used to be. Obviously, there are still millions of people that have not returned compared to the 2019 visitation numbers. We believe long-term visitation GGRs will grow, whether it be base or premium, and we'll get more than our fair share. As we've seen, the promotional situation in the market has changed, and more people are incentivized to take action. Once everyone starts playing that game, I believe that will resolve itself. We believe that our assets will prevail, and we believe that London will be an extraordinary asset, similar to what is happening in Singapore. Our results in Singapore reflect a fully developed program, and the execution in Singapore shows what can be done. We have the right kind of assets, and what we've achieved in Singapore is extraordinary. The same will happen in our business in Macao over time. As GGR increases, it will lead to increased visitation, which we are confident will happen. We'll continue to be margin-focused and effectively manage our operations so that our assets will prevail over promotions from our perspective.

Stephen Grambling, Analyst

Got it, thanks. I'll jump back in the queue. Appreciate it.

Robert Goldstein, Chairman and CEO

Thank you.

Operator, Operator

The next question is coming from Carlo Santarelli from Deutsche Bank. Carlo, your line is live.

Carlo Santarelli, Analyst

Hey, guys. Thank you. Just following up on the first quarter margins. If I look at the fourth quarter, for example, and kind of extract the big element of turnover rent that comes in and obviously, very high flow-through, it looks like margins are probably fairly similar. So it doesn't seem like a lot changed on that front. Is that accurate? Or am I missing something else seasonally there?

Robert Goldstein, Chairman and CEO

Primarily you're correct. That's a fair statement to make. The term red does, as you know, occur in the fourth quarter, and it's material. Grant, do you want to add to that?

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

Yes, it's accurate. You're right.

Carlo Santarelli, Analyst

Great. Thank you. And if I could, just one follow-up on capital allocation. Obviously, over $400 million of buyback in this quarter. As you guys think about the capital needs here going forward, the stuff that you've announced, the stuff that obviously is being contemplated and looking for budgets around and whatnot. Do you feel like this pace is adequate and where you want to be as you look throughout the balance of this year?

Patrick Dumont, President and COO

Yeah. So I think first off, I just want to say we see value in both equities. We have a very long-term bullish view given the market opportunity for growth, our market-leading investments, and how we feel about the opportunities in both markets that we have. So as we said before, we're going to be overweight on share repurchases. As we think about future capital return, we are going to be more heavily weighted towards share repurchase and dividends. We think the repurchases will be more accretive than dividends over time and we want to shrink that denominator. We're going to look to make purchases that align with our share authorization by the Board and with prior practice. We'll look to be a little bit opportunistic. We may vary levels, but I think we're going to continue to be aggressive in the market. I mean, you see with the $450 million of LVS shares, the SCL share repurchases, we think this represents an interesting opportunity. We happen to have a very strong balance sheet. We have a lot of liquidity and we aim to put it to use. We are pretty happy with where the program has taken us so far, and we will continue to utilize it and see how it goes through the year. But we're going to look to repurchase more shares.

Carlo Santarelli, Analyst

Thanks for that, Patrick. Just one aside. Guys, I'm not sure the slides are actually posted yet. It certainly could be a user error, but it looks like they haven't been posted yet for the first quarter.

Patrick Dumont, President and COO

Yeah, we're working on it.

Operator, Operator

Thank you. The next question is coming from Joe Greff from J.P. Morgan. Joe, your line is live.

Joe Greff, Analyst

Hey, everybody. I was hoping one of you could maybe help quantify the revenue and EBITDA impact from the renovations ongoing at Londoner and Cotai Arena. And then do you see that renovation disruption impact accelerating, and when do you start to see that decelerate? I know you kind of talked about the two towers and when they open up, but could you help us understand that renovation impact in terms of how you're seeing it, and I think it would be helpful for everybody.

Patrick Dumont, President and COO

Yeah. I don't know that we can necessarily quantify accurately what the impact was because we can't know what we displaced. You heard Grant describe the number of missing shows and the number of people who typically attend those shows in the Cotai Arena, and you get a sense of the type of high-quality patron that we bring in when we have live entertainment. It is impactful. I think Q1 is typically a strong quarter for us as is Q4, and you can see the difference that the impact had for entertainment. We made a decision that we wanted to take the arena offline to ensure that it becomes the highest-quality arena in Asia, as it will benefit us in the long run. As such, we decided to proceed as quickly as possible. This meant taking it offline in January this year and trying to get it done by October-November. Once we do that, we will have an incredibly high-quality arena with amenities we've never had before. This will make us more competitive in the market and drive high-quality tourism from both traditional markets and beyond, while also promoting more repeat visits from our core customer base. We are very excited about the opportunities this new entertainment asset will provide us, but unfortunately, we are going to incur some short-term pain while it is offline, and that disruption began in January ultimately. I can't quantify the exact amount, but you can gauge the impact from Grant's counts, and you realize this disruption is not immaterial. The Sheraton renovations will also contribute to this. When everything is completed, we believe it will be one of our best properties in Macao. The design will be top-tier, and the fundamentals of the Sheraton Tower are very good. Both towers are quite good and will provide additional food and beverage amenities. We think that the connectivity will serve as a significant driver for future results at that property. That's why we're confident that post-renovation, the results will match or exceed that of the Venetian. So we are investing now, and while there will be disruptions, we expect the highest impact in the summer when we have fewer keys available than ever since opening Sands Cotai Central. As keys come back online during the phased reopening, along with the arena, let's say by October-November, we will be set with a powerful set of assets to drive tourism and create cash flow. So there will be disruption; I can't measure it accurately, but it will certainly be material. Grant, if you have more to add.

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

I think you covered it perfectly. Just to supplement, Londoner phase one really elevated the quality of the product and also led to a successful rebranding and repositioning of the entire property. Phase two, however, increases the scale of high-quality products we will offer and the diversity. That’s when I think the earning potential of this resort will be fundamentally transformed.

Joe Greff, Analyst

Perfect. And...

Robert Goldstein, Chairman and CEO

I believe that once Londoner is fully completed, we will have the number one and number two assets in the GALP, by far. Not sure whether they'll be fully in front, but we will achieve unique positioning for '25 and the years ahead to dominate the market with the largest proper resorts.

Joe Greff, Analyst

Great. Thanks, Rob. You may have answered my follow-up indirectly on your prior margin commentary, and maybe this is something Grant could talk about. But can you talk about the level of the markets, premium mass reinvestment levels? Has that been pretty consistent in the first quarter? And what you're seeing year-to-date versus how the end of the year finished? Or is there any trend change on that front? That's all for me. Thanks.

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

Thanks, Joe. For us, yes, our profitability in every segment has shown quarter-on-quarter consistency in margin structure. There were no significant changes. This naturally fed into the results described in earlier questions. We maintained a steady margin this quarter despite inflation in payroll costs due to holiday pay and salary increases.

Joe Greff, Analyst

Yeah. My question—maybe I didn't explain it as clearly. The level of premium mass reinvestment from your competitors, how would you characterize that year-to-date versus the end of last year?

Robert Goldstein, Chairman and CEO

Direct investments into customers are ongoing. I believe promotional activity levels are relatively intense right now. I don't think it's higher than Q4, but it has fluctuations. Over time, there's no need in this market to be overly aggressive on promotions. The demand and supply conditions are favorable, and the quality of supply is exceptional. We are a big contributor to that. As GGR rises, our competitive market position will become even stronger. For us, it doesn't matter. We adhere to our strategy, which is asset-based and is driven off our asset base. We have made significant investments in upgrading the quality of our assets, services, and programming. We believe GGR will continue to rise and our asset base will improve. This is how we will compete and is the only sustainable and profitable way for us to operate.

Joe Greff, Analyst

Thank you.

Robert Goldstein, Chairman and CEO

We are certainly aware of the commercial environment down. We are aware of what is happening with Macao promotions, but we are confident in our products once the developments are completed. The scale will be larger, and market conditions will improve. We are committed to capturing our fair share and focused on maintaining margins and keeping our EBITDA strong. We won't resort to chasing sales through promotions. We believe in being an asset-driven company with quality assets and scale, which has proven effective over time, and once the Londoner is complete, the arena will naturally market lead.

Operator, Operator

Thank you. The next question is coming from Shaun Kelley from Bank of America. Shaun, your line is live.

Shaun Kelley, Analyst

Hi. Good afternoon, everyone. Sorry if I'm beating a dead horse here, but I did want to just kind of stick with the margin commentary, but I'll give it a little bit of a longer-term view. My question is really just trying to get a sense of what it would take to get back to let's call it the mid to high thirties on margins here. Is what we're seeing today and now increasingly expecting for the balance of '24 more about customer mix? Or is it about sort of one-time callouts around renovations and some lost high-margin non-gaming revenue?

Patrick Dumont, President and COO

So it's a very interesting question, and it's the right question to ask. As these properties reach their full potential, we anticipate margins should be in the upper 30s. If you look at the performance of the Venetian, that's a good benchmark, right? It was impacted a little by the entertainment not being available in the Cotai Arena this quarter, but also pre-pandemic, it had more mass play, which is higher margin. As tourism and visitation increase, we can support much more mass play. Our asset base, the scale of our assets, and our food and beverage amenities allow for it. Therefore, as visitation and revenue grow, we expect margins to align positively. The challenge is that this is projected into '25. We have some time to navigate until we see these benefits. There are indeed some high-value segments that are impacted due to entertainment or acquisitions of keys. However, our asset base, experience, and our investments uniquely position us for future growth and margin recovery. It's vital for our success that visitation continues to rise. It will help us utilize all our assets as we ramp up our operations.

Shaun Kelley, Analyst

Thanks, Patrick, and appreciate the insight. As a quick follow-up for whoever is appropriate. Just looking at Singapore, I mean, obviously, a breakout quarter with a run rate above $500 million. There were some one-time things in that market, Taylor Swift, I believe, being one and then, of course, event activity broadly speaking. But also there’s been a change in, I think, Chinese visa policies that were potentially fruitful for the market. So the big question here is, what's the right run rate? And do you think, again, maybe event activity agnostic we could sustain above the $500 million mark? And are we kind of off to the race here, even considering that number incorporates some disruption from Tower Three?

Robert Goldstein, Chairman and CEO

I think the first point to note is that the building is still under renovation. We believe a $500 million quarter annualized is very durable and more. Most importantly, the growth in Singapore as a desirable destination is soaring. It's not just Taylor Swift; it's Bruno Mars, Hamilton, the F1 event, and a plethora of others. Singapore has accelerated remarkably. This is a result of government support and successful business initiatives. Our location is exceptional, and yes, this is a sustainable trend. They have hosted a multitude of large events, and our building has less than 200 top-tier suites. Upon completion, we will have over 700, which aligns with premium mass and super premium mass. Our earning potential is immense. This may approach $2 billion, and we may eventually reach that figure. As for Macau, there is frustration, as we are under construction with self-inflicted wounds. However, once we follow Singapore’s example, similar results in Macao are expected. With recent governmental meters to increase tourism and entertainment events, we see a promising support structure ahead.

Shaun Kelley, Analyst

Thank you.

Operator, Operator

Thank you. The next question is coming from Robin Farley from UBS. Robin, your line is live.

Robin Farley, Analyst

Great. Thanks. I just wanted to circle back. You were commenting earlier and the slides were not up yet, so I haven't been able to go through them. But it sounded like you were saying that your sequential growth in mass and premium were both at a similar rate sequentially. Just wondering if there's anything to add any color around that since, you know, the market has generally been seeing better premium mass recovery. Just any color you'd add there.

Patrick Dumont, President and COO

Grant, I think you should take that. Grant?

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

Yeah, Robin. I don't know if the deck is up. It's up now.

Patric Dumont, President and COO

It's up, guys. Yes.

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

If you look at premium mass win, we’re up 2% quarter-on-quarter, while base mass was down 3% quarter-on-quarter. However, I think my earlier point is that the differences might not be material. We did however, see that patron numbers increased as our properties saw sequential growth, as did the wider market.

Robin Farley, Analyst

Okay, great. That's helpful. Thank you. And just any thoughts around New York timing and your expectations there? Sort of anything new to add there? Thanks.

Patrick Dumont, President and COO

Yeah. But we're very disappointed by New York. I mean, we've been working there for a long time, and we thought it would happen in '24. That was the state; now they're saying '25 or '26, but I don't have any real clarity. To be honest with you, it's confusing and disappointing because we've invested a lot of time and effort in New York. So I have no guidance because I can't provide candor and solid insight. We just don't know about New York, and we can only hope things turn around there.

Robin Farley, Analyst

Okay, great. Thank you.

Robert Goldstein, Chairman and CEO

Thanks, Robin.

Operator, Operator

Thank you. The next question is coming from Vitaly Umansky from Seaport. Vitaly, your line is live.

Vitaly Umansky, Analyst

Hi. Good morning, guys. I think maybe switching over to Singapore if we think about quantifying the effect of what the renovations at that property have already done, and Rob, you talked about potentially this property getting up to about $2.4 billion, $2.5 billion. In theory, once the renovations are done in the first phase of the property, where do we see constraints coming in? If you look at the hotel occupancy rates today and ADRs, they continue to expand. At some point, we're going to reach a limit as to how many rooms can be filled, and then we're talking about filling them with higher-value customers. So when we think about before we get to the expansion, where is that constraint, and how quickly do you think we can get there?

Robert Goldstein, Chairman and CEO

It's a good question. Unfortunately, the speed at which we reach the limits of our capacity was something we never dreamed would occur so soon after COVID. The growth in premium mass is powerful, and we've mentioned how Grant described it last week; it’s still a drop in the bucket. There’s so much more growth potential. I believe the only constraints will relate to the volume of rooms and slot machines we possess. We'd hope to max out the occupancy of our rooms with gaming customers. The suites we are creating are extraordinary. I would set ambitious goals for our Company over the next decade, estimating they are very attainable. $600 million in actual revenue this quarter is exciting and denotes growth. However, the limitations on our capacity are already becoming apparent, and this is why we are expanding our product portfolio. This is an exceptional location that attracts significant business, and as Singapore continues to develop as a lifestyle and leisure hub, demand will surely grow.

Patrick Dumont, President and COO

Hey, Vitaly, welcome back to the call. I think the key takeaway is we hold a strong opinion of Singapore's future success. So strong that we are investing a couple of billion dollars in the property and are eager to proceed with IR2 at any opportunity. Factors that facilitate Singapore's thriving market include excellent infrastructure, stable governance, and favorable investment policies. The results reflect that. More investment into hotels will lead to an increase in tourism as it helps create a critical mass of visitors. If you consider the wealth being generated in Southeast Asia, it’s impactful. In the last four years, even during the pandemic, it was meaningful, and many new customers seeking luxury travel have emerged. They aim to experience what Singapore offers. We're positive about future tourism growth in Singapore. It's an intriguing question to consider where peak demand will stabilize. We don’t anticipate finding that peak imminently. The constraints we see are primarily supply-related. When looking at who is attempting to enter Singapore and the activities occurring there, we remain very optimistic and proactive about the trajectory ahead.

Vitaly Umansky, Analyst

Thanks, Patrick and Rob. Maybe just a follow-up switching gears to Macau. Grant, you mentioned earlier that the base mass growth has not been as strong. I understand you have strong positioning in direct VIP and premium markets, but given that Sands leads in larger scale and base mass, the recovery in base mass has not been as strong as the premium end of the market. Can you provide an explanation on that, if you agree, and how does the market need to change over the balance of the quarters to reestablish some growth in base mass, which would be stronger for Sands than for others?

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

Yes. Thanks.

Patrick Dumont, President and COO

Grant, go ahead.

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

Yeah, sure. I agree that we have a massive advantage through our scale, which encompasses all segments. While base mass recovery has been slower, if you review our actual numbers, the volume growth in both premium mass and base mass is not dissimilar. More specifically, we are still welcoming more patrons in the base mass sector, and the quality of this patronage has increased significantly as the revenue per visitor is higher compared to pre-COVID levels. However, there's still room for the base mass revenue and visitation to recover further; thus, we remain optimistic about its potential to improve. A number of factors influence this but attributing it to one or two would be overly simplistic. As the overall economy improves and as we see more lifestyle and entertainment options available, we anticipate continued growth in base mass, enabling us to best exploit our capacity.

Vitaly Umansky, Analyst

Thanks, Grant. That's very helpful.

Operator, Operator

Thank you. The next question is coming from Chad Beynon from Macquarie. Chad, your line is live.

Chad Beynon, Analyst

Afternoon. Thanks for taking my question, and thanks for posting the slides. On Slide 44, the flags of interest remain the same as what we've seen in the past couple of decks: Macau, Singapore, New York, and you have talked through all these. Recently, there have been discussions about Thailand, with some believing that an integrated resort could open there even ahead of Japan. So, I’m wondering if you could opine on your views. I know it’s early yet, but could this market be sizable enough? Could a resort generate meaningful cash flow for you to consider entering the market? Any views there? Thanks.

Robert Goldstein, Chairman and CEO

Yeah. We have definite interest in Thailand, as it might actually unfold sooner than Japan. Though it's early days, we have much work to do on the numbers while assessing opportunities. The market is very exciting on multiple levels. With the population size, accessibility, and the willingness of travelers to visit, it's consistently ranked as the top resort destination city in Asia. So, yes, we are definitely interested. However, as we've mentioned, the landscape is still developing, and there’s significant potential ahead. We are all ears and conducting ample research to determine what would make sense for our business strategy moving forward.

Chad Beynon, Analyst

Thank you. And then on the P&L statement, investors are increasingly focusing on EPS given your performance and stock trading. I believe there was a tax benefit in Q1. Could you discuss that potential benefit? Additionally, any insights you may have regarding how the tax rate will align with what we observed in prior years, given your mix of Singapore and Macau profits?

Patrick Dumont, President and COO

I'll answer this in reverse. Yes, it will look more normal. The tax situation was a one-time item. It was related to a reversal in Macau of $57 million. However, we expect the tax rate to return to its standard level going forward.

Chad Beynon, Analyst

Thanks, Patrick. Appreciate it, guys.

Patrick Dumont, President and COO

No problem.

Operator, Operator

Thank you. The next question is coming from David Katz from Jefferies. David, your line is live.

David Katz, Analyst

Hi. Evening. Thanks for taking my questions. When we consider the Macao strategy in light of the renovations this year, I would think about reinvestment credit referral programs that people are discussing. What is your philosophy on those this year? Do you think we dial them back until next year? How should we conceptualize that?

Robert Goldstein, Chairman and CEO

I'm trying to understand your question. Will we dial back our investment programs because we're under renovation? Is that your question?

David Katz, Analyst

That's right. Are you more conservative versus aggressive?

Robert Goldstein, Chairman and CEO

No, we're not going to dial back efforts; we just may choose to be less aggressive than some of the competitive pressures. Our belief is that we are committed to making our facilities among the best in the industry. We have scale and a lifestyle-focused product. We believe long-term GGRs will grow, and we will share in that growth. Margins will stay healthy as well. This is a crucial part of our business strategy. Essentially, while this year will involve improvements in the arena and the Londoner, we will maintain consistent reinvestment activities.

David Katz, Analyst

Perfect. I wanted to ask about the slide showing your maturities, particularly those slated for '25-'26. Do you have an updated perspective on how you plan to manage those?

Patrick Dumont, President and COO

You will see us handle LVS maturities and SEL 25s before our focus shifts to the subordinated term loan down at Sands China. That loan most notably benefits SEL by offering favorable lending terms over an extended period. Importantly, SEL's maturity is not due until 2028, and we will assess our plans accordingly, based on their capital needs. We maintain substantial liquidity at the parent company, providing us with the ability to manage this effectively.

Daniel Politzer, Analyst

Hey, good afternoon. Thanks for taking my question. First, regarding Macau, this is the second consecutive quarter during which your mass shares have declined a bit. Various factors impact this, but can you provide deeper insight? Is this purely attributable to disruption or heightened promotional levels? Or is there a fundamental shift in customer behavior in the market?

Patrick Dumont, President and COO

I want to point out before Grant answers that when we generate less revenue due to disruption, it naturally leads to reduced market share. With the arena being out, our revenues and margins were lower. This will reflect in our market share.

Grant Chum, CEO and President of Sands China and EVP of Asia Operations

It's challenging to isolate the reasons behind these shifts. There’s a promotional environment in Macau that has been discussed. Additionally, we are experiencing disruptions due to capital projects. However, quarterly fluctuations based on these factors could easily swing our performance. Our mass revenues were flat this quarter while the market grew around 3-4%. However, factors could easily have gone more in our favor during the quarter and brought up our performance considerably. If we look at the longer term, we traditionally fluctuate in market share; however, we consistently find ourselves within the 30s in EBITDA share in the long run. The scorecard for 2023 shows we achieved a 35% EBITDA share against a 26% GGR share. We were leaders in GGR and by a much larger margin in EBITDA and non-gaming revenue where we held a 41% market share. Overall, while quarter to quarter shares fluctuate due to various competitive factors, we have performed steadily in the long run.

Daniel Politzer, Analyst

Got it. And for the follow-up, I think you mentioned you have up to a 71% share of 1928 HK. Can you illuminate where that share could potentially go over time? Is there an upper limit, and what are the factors to consider in increasing that ownership stake?

Patrick Dumont, President and COO

I think there is an upper limit of 75% per exchange rules. However, waivers are granted based on size and equity. We certainly see value in properties in SEL, and our investment correlates with confidence in its future. We aim to remain aggressive in extending that stake, hence prioritizing SEL’s investments. We'll watch this space closely.

Robert Goldstein, Chairman and CEO

Thank you.