Because of the impact the coronavirus crisis has made on Las Vegas’ economy, Las Vegas Sands made the decision to suspend its dividend program, according to a statement made on Thursday from Sheldon Adelson, the company’s Chairman and CEO.
The decision was made with strong consideration of how well their balance sheet would fare, with Adelson calling it a “necessary component” when it comes to long-term stockholder value.
Adelson, who is the largest shareholder of Las Vegas Sands company, assured the public that his goals and interests are “directly aligned” with the interest of every shareholder. It’s through their balance sheet that Adelson believes the company will bounce back victoriously from the virus’ impacts.
Those interests are future-oriented and optimistic, according to Adelson. The company foresees many strategic opportunities coming out of its decision to suspend the dividend and looks forward to watching those opportunities come to life once the virus is out of the question.
Adelson also added that the company will revisit the dividend suspension whenever the first reasonable window presents itself.
Company’s Most Recent Dividend
The company’s latest dividend was recorded on Jan. 29. During that last dividend, quarterly dividends of $0.79 per share were taking place.
That’s a lot lower than their 2019 amount per share for dividends, which was $3.08 per share.
Back in 2019, Las Vegas Sands board of directors announced their plans to raise the company’s recurring common stock dividend .10 cents higher, to $3.16 per share in 2020. This is according to filing information found on the Securities and Exchange Commission.
COVID-19 Impact on Las Vegas Sands Corp.
In Adelson’s statement, he explained how in his over seventy years in business, that he’s never seen anything like the economic impact caused by the coronavirus crisis on their business, calling it “unprecedented.”
In March, shares of casino giant Las Vegas Sands (NYSE:LVS) fell 27.2%, according to data provided by S&P Global Market Intelligence. In April, shares dropped 10.7%.
Luckily, Las Vegas Sands has over $4 billion of cash on its balance sheet. That’s good news, along with the fact that the company’s Asia properties are open for business (In February, their properties closed for 15 days before reopening).
If the company’s Macau and Singapore properties are able to able to bring in cash flow during this time, it could be the financial support that could bridge in the gap of losses being incurred on the American properties’ front.
While we’re glad that Las Vegas Sands is taking a resourceful and optimistic approach to the economic downfall caused by COVID-19, we do understand that for things to look back up for the industry, it will depend on several uncontrollable factors.
Some of those factors include the extent and duration of the outbreak, the response of government authorities, general economic conditions, operational results, cash flows, development processes, liquidity and more.
COVID-19 Impact on Las Vegas as a Whole
A recent study found that Nevada’s economy ranked as the second most vulnerable in the country after Maine.
It makes sense. The town is built around tourism and gaming, and with social distancing guidelines in full effect, it cancels out the reality of a traditional Vegas in the meantime.
Traditional Vegas which like droves of crowds gathered together, walking on the Las Vegas Strip and admiring the sites, gamblers going in and out of casinos, touching slot machines and playing at table games and what have you.
The Vegas we all know and love simply could not exist during a global pandemic on this scale. With casinos closed and nonessential businesses shuttered, it helps to avoid a possible disastrous spread of the virus.
Las Vegas Sands Still Serving as a Major Community Aid During Crisis
While Las Vegas Sands has been hit hard by the pandemic, much like every other major casino operator in Las Vegas and the rest of the country, the company has still found ways to support the community in big ways.
On April 1, the company announced they would be donating two million pieces of protective personal equipment (PPE) to Nevada and New York.
They sent one million masks each to each state and provided the local healthcare industry with 20,000 protective suits.
The company also pledges to give $250,000 to local organizations that help in providing food and other vital supplies to individuals during the COVID-19 crisis.
About Las Vegas Sands Corp.
The Las Vegas Sands Company is an American casino and resort company based in Paradise, Nevada.
It includes world-famous US properties The Venetian, The Palazzo, Sands Expo & Convention Center in Las Vegas, as well as its overseas Asian properties in Macau and Singapore, including Sands Macao, The Venetian Macau, The Plaza Macao, The Parisian Macao, Marina Bay Sands, and Sands Cotai Central.
With the casino closures lasting until April 30, unless Gov. Sisolak decides to further extend the order, it’s no surprise that casino operators are looking for resourceful ways to keep themselves afloat amid the economic downfall caused by COVID-19.
We hope that casinos not only in Las Vegas but the rest of the country will be able to come back strong and in good standing once everything blows over and returns to normal.
Until then, we’re keeping the faith and staying on top of the coronavirus coverage in Las Vegas.
Be sure to keep checking back for updates to see how the situation will continue to unfold in Sin City.