China – SJM maintains solid revenue increases
Sociedade de Jogos de Macau (SJM) Holdings has seen a 12 per cent increase in first-half net profit due to consistent demand from gamblers which pushed the profit higher than analysts’ expectations.
The group, who operates 20 of Macau’s 35 casinos, reported net profit for the six months to June of HK$3.8bn (US$487m) up from HK$3.4bn for the corresponding six months in 2012. The average forecast from analysts was HK$3.6bn.
Dr. Ambrose So, Chief Executive Officer of SJM, said: “We are pleased to note that in the first half of 2013, SJM showed strong operating results, with increases in net profit, adjusted EBITDA and revenue. We are optimistic about the future, as we continue to work on yielding our gaming floors and containing costs, whilst planning to meet the needs of the growing market with our large-scale resort development on Cotai.”
The group’s mass market table gaming revenue grew by 3.9 per cent, whilst VIP gaming revenue showed an increase of 10.4 per cent during the first half of 2013, compared with the year-earlier period. During the same period slot machine operations revenue decreased by 5.7 per cent compared with the year-earlier period.
SJM continued to lead in market share of the Macau casino gaming market, in spite of new gaming capacity introduced by competitors, with 25.8 per cent of mass market table gaming revenue, 26 per cent of VIP gaming revenue, and overall gaming market share of 25.3 per cent.
SJM also maintained a strong financial position with cash, bank balances and pledged bank deposits of HK$25bn as at 30 June 2013. It continued to obtain excellent performance from its flagship Casino Grand Lisboa, which increased revenue, Adjusted Property EBITDA and attributable profit by 12.6 per cent, 2.7 per cent and 1.4 per cent, respectively, as compared to the year-earlier period. Hotel Grand Lisboa achieved average occupancy of 95 per cent.
The results are particularly impressive as some analysts believed not yet having a property in Cotai could lessen the operators stranglehold on the market.
In May 2013 a land concession contract was published in the official gazette of Macau, pursuant to which SJM will lease approximately 70,468 sq. m. of land on Cotai from the Macau Government for an initial term of 25 years. The Group intends to build and operate a casino gaming resort containing approximately 700 gaming tables and 1,000 slot machines as well as approximately 2,000 hotel rooms.
