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SJM gaming revenue drops 37.9 percent in 15Q3

SJM Holdings reported a 37.9 percent drop in gaming revenue to HK$11.24 billion ($1.45 billion) in 15Q3 compared to the same period the year before.

Adjusted EBITDA during the period decreased by 49.5 percent from 14Q3 to HK$884 million and for the nine months ended September 30 decreased 49.2 percent to HK$3.14 billion.

Profit attributable to the owners decreased by 81.4 percent to HK$285 million and for the nine months decreased by 61.8 percent to HK$2.07 billion. 

“While challenging conditions in Macau’s gaming market continued in the third quarter, with gaming revenues continuing their decline for the sixth consecutive quarter, SJM is making progress in controlling costs and enhancing customer service,” said Ambrose So, CEO of SJM Holdings.

Gaming revenue of the flagship Casino Grand Lisboa decreased by 48.5 percent to HK$3.54 billion in 15Q3, while its adjusted EBITDA decreased by 49.2 percent to HK$507 million. 

For the nine months, Casino Grand Lisboa’s gaming revenue decreased by 45 percent to HK$12.70 billion.

“Our strong balance sheet positions us well for the completion of the Lisboa Palace project which remains on schedule and on budget, and we remain optimistic about the future.”

SJM lost some market share in 15Q3, with gaming revenues accounting for 21.3 percent of Macau’s casino gaming market during 15Q3 compared with 22.5 percent in 14Q3.

Bernstein Research labeled SJM’s “poor across board,” with SJM at a disadvantage compared with its competitors when looking to further cut costs.

“Management admitted that further cost cuts will be difficult as the company cannot relocate labor to new casino property (as their competitors do),” said analyst Vitaly Umansky.

“In addition, the company has a small non-gaming business, which leaves it less room to control labor costs compared to its competitors. However, we believe the company experiences leakage and cost over-runs resulting in low margins across its operations.”


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