Supplier News
China – Record quarter at SJM despite ongoing renovations
By Phil - 15 November 2013
Renovations at existing properties dented expected revenues for Macau casino operator SJM in the third-quarter although profit still grew by an impressive 10.3 per cent year on year to HK$1.82bn.
The operator closed its Oceanus casino in February to begin HK$600m renovations whilst its Grand Lisboa, Casino Lisboa and Jai Alai operations have stayed open whilst similar work is carried out. Closures of mass market tables in Lisboa also impacted the results. Despite this the quarter still recorded a record quarter for SJM.
The group’s flagship Casino Grand Lisboa increased its gaming revenue in Q3 2013 by 5.6 per cent over Q3 2012 to HK$7,728m whilst its Adjusted EBITDA decreased by 7.1 per cent to HK$1,067m.
It operated an average of 585 VIP gaming tables, down from 601 tables for the corresponding period last year, 1,186 mass market gaming tables, up from 1,158 and 3,348 slot machines, down from 3,812 for the third quarter in 2012.
Dr. Ambrose So, Chief Executive Officer of SJM Holdings, said: “We are very pleased to report another record quarter. Together with Macau’s increasing popularity as a tourism destination, SJM’s gaming and non-gaming operations are showing continued strong growth.”
During the third quarter, SJM’s VIP gaming revenue was HK$13,575m, an increase of 8.8 per cent from
HK$12,482m in Q3 2012, mass market gaming revenue was HK$7,141m, an increase of 18.2 per cent from HK$6,040m, and slot machine (and Tombola) revenue was HK$339m, a decrease of 8.5 per cent from HK$370m.
CLSA analyst Richard Huang said: “They have quite a few things on hand. They have been doing renovations on Casino Oceanus at Jai Alai and the Lisboa, which make it difficult for the company to achieve earnings growth. With Macau being mainly an international tourist destination, the capacity is constrained.”
Whilst Oceanus won’t reopen until the fourth quarter of 2014, work at the other properties will be completed much earlier with Mr. Huang saying this will drive accelerated earnings.
Looking forward over the coming years, the financial predictions for SJM’s growth aren’t as strong as for its competitors although it will be opening its HK$25bn Cotai project, including the Palazzo Versace designed by Donatella Versace, in 2017. It will house 700 tables, 1,000 slot machines and 2,000 hotel rooms.
