Las Vegas Sands Corp. (NYSE:LVS)

The financial data over the five-year period reveals several notable trends in the company's profitability and capital efficiency. The net operating profit after taxes (NOPAT) initially shows a positive and increasing trend, rising from 3,351 million USD in 2018 to 3,870 million USD in 2019. However, a significant decline occurs starting in 2020, with NOPAT turning negative at -1,708 million USD and continuing to exhibit negative values through 2021 and 2022, although with a slight improvement each year.

Invested capital demonstrates a different pattern. It decreases gradually from 19,047 million USD in 2018 to a low point of 15,828 million USD in 2021, before rising again to 18,926 million USD in 2022. This suggests possible capital restructuring or asset disposals during the middle years, followed by reinvestment or acquisition activities in the most recent period.

The return on invested capital (ROIC), which measures the efficiency of capital use to generate profit, indicates a strong performance in the first two years, with ROIC rising from 17.59% in 2018 to 21.48% in 2019. However, ROIC then turns negative in 2020, declining sharply to -10.71%, and remaining negative in the following years, though gradually improving to -5.27% by 2022. This sharp downturn aligns with the negative NOPAT figures and indicates challenges in generating returns from invested capital during this period.

Overall, the data depicts a company that experienced robust profitability and efficient capital utilization until 2019, followed by a period of significant operational losses and decreased capital efficiency beginning in 2020. The gradual improvement in both NOPAT and ROIC in the subsequent years may suggest initial stages of recovery or adaptation to adverse conditions affecting the business.

Over the analyzed periods, several key financial performance indicators display distinct patterns and fluctuations. The operating profit margin (OPM) demonstrates a strong positive trend from 27.1% in 2018 to 31.3% in 2019, indicating improved profitability during this interval. However, this margin sharply deteriorates thereafter, turning negative at -44.25% in 2020, and remaining negative in 2021 and 2022 at -20.5% and -16.83% respectively. This suggests significant operational challenges or extraordinary expenses impacting profitability starting in 2020, with only partial recovery in subsequent years.

The turnover of capital (TO) ratio shows a downward trend from 0.72 in 2018, peaking slightly at 0.76 in 2019, before drastically declining to 0.23 in 2020. Following this, it experiences minor fluctuations, settling near 0.22 by the end of 2022. This reduction in asset turnover suggests decreased efficiency in utilizing capital to generate revenues beginning in 2020 and persisting through the observed periods.

The effective cash tax rate (CTR) exhibits a consistently high level, with the complement (1 – CTR) hovering closely around 90% during 2018 and 2019, then reaching and maintaining 100% from 2020 through 2022. This pattern indicates that the company effectively pays little to no cash taxes in the latter years, potentially due to sustained losses or tax strategies reflecting its financial difficulties.

Return on invested capital (ROIC) aligns with the trends noted in profitability and efficiency metrics. It increases from 17.59% in 2018 to a peak of 21.48% in 2019, reflecting efficient capital utilization and strong returns. However, starting in 2020, it shifts to negative territory (-10.71%), continuing at -6.57% in 2021 and -5.27% in 2022. These negative returns imply losses on the invested capital base and underscore ongoing challenges in generating value from investments during these years.

In summary, the data reveals a robust financial performance through 2019, followed by a marked decline beginning in 2020 across all key ratios. This decline manifests in reduced profitability, diminished capital turnover, consistently full cash tax reliefs, and negative returns on invested capital, indicating significant operational and financial difficulties in the more recent years.

Operating Profit Margin (OPM)

Improved from 27.1% to 31.3% between 2018 and 2019, then sharply declined to negative values from 2020 onward, indicating deteriorating profitability.

Turnover of Capital (TO)

Initially stable with a slight increase in 2019, followed by a substantial drop starting in 2020, indicating reduced efficiency in capital use.

1 – Effective Cash Tax Rate (CTR)

Consistently high around 90% initially, reaching and maintaining 100% from 2020, implying little or no cash tax payments during loss periods.

Return on Invested Capital (ROIC)

Positive and increasing through 2019, but turning negative from 2020 onwards, reflecting failure to generate returns from invested capital.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes exhibited a positive trend from 2018 to 2019, increasing from 3,720 million USD to 4,300 million USD. However, there was a notable reversal starting in 2020, with NOPBT turning negative at -1,598 million USD, followed by continued negative performance in 2021 and 2022, reaching -868 million USD and -692 million USD respectively. This indicates significant operational challenges affecting profitability during the latter period.

Net Revenues

Net revenues remained relatively stable between 2018 and 2019, marginally increasing from 13,729 million USD to 13,739 million USD. A substantial decline is observed in 2020, with revenues dropping sharply to 3,612 million USD. Slight improvements were seen in 2021 and 2022, with net revenues rising modestly to 4,234 million USD and then slightly decreasing to 4,110 million USD. Despite some recovery, revenues remain significantly below historical levels.

Operating Profit Margin (OPM)

The operating profit margin reflected a strong positive performance in 2018 and 2019, increasing from 27.1% to 31.3%. This was followed by a drastic downturn in 2020, with the margin plummeting to -44.25%. The margin remained negative in the subsequent years, improving somewhat to -20.5% in 2021 and -16.83% in 2022, yet indicating continued operational inefficiency relative to the earlier period.

The financial data reveals several notable trends in key performance indicators over the five-year period from 2018 to 2022.

Net Revenues

Net revenues remained relatively stable between 2018 and 2019, showing a negligible increase from 13,729 million USD to 13,739 million USD. However, a significant decline is evident in 2020, with revenues dropping sharply to 3,612 million USD. This downward trend continued during 2021 and 2022, with revenues reported at 4,234 million USD and 4,110 million USD respectively, indicating partial recovery but still far below the levels of the pre-2020 period.

Invested Capital

Invested capital decreased progressively from 19,047 million USD in 2018 to a low of 15,828 million USD in 2021. This was followed by a rebound in 2022, with invested capital rising back to 18,926 million USD. Despite fluctuations, the invested capital in 2022 almost reaches the levels recorded at the beginning of the period.

Turnover of Capital (TO)

The turnover of capital ratio, which measures the efficiency of capital utilization to generate revenue, revealed a declining trend throughout the period. It decreased from 0.72 in 2018 to 0.76 in 2019, indicating a minor improvement initially. Nevertheless, following the downturn in revenues, TO plunged substantially to 0.23 in 2020, improving slightly in 2021 to 0.27, and then declining again to 0.22 in 2022. This signifies a marked reduction in capital efficiency starting in 2020, consistent with the overall revenue decline.

In summary, the data underscores a period of significant revenue contraction beginning in 2020, likely reflecting external challenges impacting business operations. The reduction in invested capital over the same period suggests measures to adjust investment in response to lower revenue generation. Nevertheless, the modest recovery in invested capital in 2022 did not translate into improved capital turnover, highlighting ongoing efficiency challenges. The overall pattern points to a substantial disruption in business activity starting in 2020, with only partial recovery in subsequent years.

Cash Operating Taxes

The cash operating taxes exhibited a fluctuating trend over the period under review. Beginning at 370 million US dollars in 2018, the taxes increased to 431 million in 2019 before experiencing a significant decline to 110 million in 2020. This drop corresponds likely to the operational challenges during that year. Subsequently, the taxes increased moderately to 172 million in 2021 and further rose to 305 million in 2022, indicating a recovery trend but still below the pre-2020 levels.

Net Operating Profit Before Taxes (NOPBT)

A pronounced volatility is observed in the net operating profit before taxes. The figure grew from 3,720 million US dollars in 2018 to 4,300 million in 2019, representing a strong operational profit increase. However, a sharp reversal occurred in 2020, with NOPBT turning negative at -1,598 million US dollars. This negative trend persisted in the following years with -868 million in 2021 and -692 million in 2022, indicating sustained losses and challenges in profitability post-2019.

Effective Cash Tax Rate (CTR)

The effective cash tax rate was stable around 10% during 2018 and 2019, precisely 9.93% and 10.02%, respectively. Data for subsequent years is not available, likely due to the negative operating profit before taxes which typically impacts the tax liabilities.