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Monaco – Société des Bains de Mer down 23 per cent in Q3

By - 25 January 2021

Société des Bains de Mer and its subsidiaries recorded a 23 per cent decline in consolidated sales during the third quarter of fiscal year 2020/2021.

In the period from October 1 to December 31 2020, the revenue generated by the SBM Group came in at €95.8m against €124.3m the previous year.

The operator stated: “The Covid-19 epidemic is still having a strong impact on the activity of the SBM Group While the Principality of Monaco has not imposed confinement to deal with the second wave of the epidemic which is raging this fall in Europe. The time slots for opening casinos and restaurants have nevertheless been reduced from November 1 and spas, swimming pools and bars were closed in accordance with government decisions.

Revenues for the gaming sector came in at €45.9m for the past quarter, down 16 per cent compared to the same period of the previous year. This decrease remains limited in view of the health context, with the table games activity having benefited from a particularly favourable hazard during the month of December.

The hotel sector recorded a 49 per cent decrease in turnover for the quarter, which stood at €23.5m against €45.7m previously. “Even though hotels and restaurants may have remained open during this period, the sector is particularly affected by the Covid-19 pandemic and the second wave that is raging in Europe,” SBM explained.

Over the first nine months of the financial year, the consolidated turnover of the SBM Group amounted to €264.5m compared to €532.9m for the same period of the previous financial year, i.e. a decrease of 50 per cent compared to last year.

Only the Hôtel de Paris and the Monte-Carlo Bay Hotel & Resort have remained partially open to accommodate customers, particularly permanent residents, but with low occupancy.

It was not until June 2, 2020, the date on which the Monegasque government authorised the reopening of restaurants and casinos, that the establishments of the SBM Group gradually reopened, by putting in place health measures to ensure maximum safety for customers and staff. The opening hours of establishments were then reduced during the 3rd quarter as part of the measures taken by government authorities, including the introduction of a curfew.

The SBM Group therefore expects a significant impact of the health crisis on activity for fiscal year 2020/2021 and a sharply deteriorated financial performance compared to that of the record fiscal year 2019/2020, with an operating deficit. for the second semester which should be higher than that of the first six months.

The Group has implemented a drastic reduction in operating expenses. As soon as the establishments were closed, the SBM Group proceeded to adapt its organization, with the taking of leave and recourse to short-time working, relying on the government support system set up in the Principality of Monaco (Total Temporary Unemployment Reinforced).

In addition to the drastic reduction in operating expenses, the SBM Group has reinforced strict control of its investments. All the investment projects were reviewed and a significant reduction in budgets was made with a suspension of non-essential investments.

It is structured around three guiding principles: a voluntary departure plan, open to all Group employees over the age of 57, on the essential condition of non-replacement; a collective departure plan targeted at certain departments for reasons of overstaffing or reorganisation aimed at restoring competitiveness; and the renegotiation of certain collective agreements or practices in force within the SBM Group.

The company said: “The opening of the Voluntary Departure Plan was a great success. As of the date of this press release, 164 employees have already confirmed their agreement to the proposed conditions and other responses are expected shortly, in order to finalise all of this system by the end of this fiscal year. The success of the Voluntary Departure Plan makes it possible to reduce the scale of the Forced Departure Plan initially planned, which concerned a total of 161 people following the Employment Protection Plan filed with the Labor Department. Through a mobility process currently underway, the SBM Group will succeed in reducing the number of forced departures to a minimum. Finally, negotiations relating to certain collective agreements or practices in force within the SBM Group are continuing.”

It should be noted that all of these measures complement the actions already undertaken, and aim to generate an overall annual reduction in operating expenses of around €25m

To supplement its short-term financing resources, the SBM Group has a program to issue short-term negotiable debt securities (NEU CP) for a maximum amount of €150m. As of January 21, 2021, the outstanding amount of securities issued under this program to investors amounted to €65m. It is recalled that the Monegasque State has undertaken to subscribe, within the limit of a cumulative principal amount of 120 million euros, all or part of the negotiable debt securities that the SBM Group would issue within the framework of this program and would not find a market taker for whatever reason.

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