GGRAsia – SJM Holdings 1Q profit up 17pct on mass GGR

SJM Holdings 1Q profit up 17pct on mass GGR

Apr 30, 2019 Newsdesk Latest News, Macau, Top of the deck

Profit at Macau casino operator SJM Holdings Ltd increased 16.5 percent year-on-year in the first quarter of 2019, according to unaudited highlights of the business filed to the Hong Kong Stock Exchange on Tuesday.

Such profit was HKD850.0 million (US$108.4 million) in the three months to March 31, compared to HKD730 million in the prior-year period.

The increase in profit was mainly due to an improvement in mass market gross gaming revenue (GGR), said the firm. Such revenue was approximately HKD6.19 billion during the reporting period, up by 7.9 percent in year-on-year terms.

The group’s gaming revenue accounted for 14.1 percent of the Macau market’s casino gaming revenue during the first quarter, as compared with 14.7 percent in the first quarter of 2018, according to the company.

The group’s VIP gaming revenue for the first three months of 2019 was just under HKD3.94 billion, a decrease of 19.4 percent from the HKD4.88 billion achieved a year earlier.

Total VIP chip sales for the group during the first quarter of 2019 were HKD123.0 billion, compared to HKD178.0 billion a year earlier. VIP gaming hold percentage – before commissions and discounts – was 3.20 percent; it was 2.74 percent in the first quarter of 2018.

SJM Holdings’ slot machine GGR in the first quarter of 2019 was HKD290.0 million, a decrease of 1.3 percent in year-on-year terms.

Market-wide accumulated GGR for the first quarter of 2019 in Macau declined by 0.5 percent in year-on-year terms, to MOP76.15 billion (US$9.42 billion), show data from the city’s gaming regulator. VIP baccarat GGR fell 13.4 percent from the prior-year period, while mass-market GGR including slots was MOP38.94 billion, compared to MOP33.55 billion a year earlier.

SJM Holdings’ 16 satellite – third party-promoted – casinos generated quarterly GGR of approximately HKD5.43 billion in the January to March period.

The firm’s capital expenditure during the first quarter of 2019 was HKD1.58 billion, which was primarily for construction in progress. The company is currently building a new casino resort – named Grand Lisboa Palace – in Macau’s Cotai district.

SJM Holdings noted in a February 28 statement that construction work for the firm’s HKD36-billion Grand Lisboa Palace would be completed “in the first half of this year”, with operations beginning “as soon as possible thereafter”.

EBITDA improvement

During the opening three months of 2019, SJM Holdings operated an average of 280 VIP gaming tables, a slight decline from the 284-unit average recorded a year earlier. SJM Holdings had an average of 1,410 mass-market gaming tables in the first quarter of 2019, down seven units in year-on-year terms; and 2,594 slot machines, down 3.9 percent from the prior-year period.

The group’s total net revenue of approximately HKD8.69 billion in the first quarter 2019 included revenue from hotel, catering and related services amounting to HKD182.0 million, compared to HKD187.0 million in the prior-year period.

SJM Holdings’ group adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) in the three months to March 31 increased by 8.9 percent year-on-year, to nearly HKD1.08 billion.

The adjusted EBITDA margin of the group in the first quarter – i.e., adjusted EBITDA divided by total revenue – increased to 12.4 percent from 11.5 percent in the first quarter of the prior year.

Ambrose So Shu Fai, chief executive of SJM Holdings, said in a statement accompanying the results highlights: “We are very pleased that our efforts to strengthen our mass market business have resulted in material increases in SJM Holdings’ net profit and adjusted EBITDA during the first quarter.”

During the first quarter of 2019, the group’s flagship property on Macau peninsula – the Grand Lisboa casino hotel (pictured) – achieved an average occupancy rate of 94.7 percent and average room rate of HKD1,500 per night, as compared with average occupancy rate of 97.2 percent and average room rate of HKD1,582 per night in first quarter 2018.