To say business is good for SJM Holdings at this point would be a gross understatement. Business is more than good, it’s gravy. It’s all about attracting the high rollers, the fat cats, the ballers and with a 33% market share of the business in Macau according to JP Morgan, nobody is doing it better than SJM.
Already Macau’s largest casino operator by revenue, SJM Holdings reported today a third-quarter net profit that was more than six times last year’s level. According to the report, the huge profit jump was driven by sharp growth in high-roller gambling revenue. Attracting the VIP’s is Stanley Ho’s specialty and though the VIP business is generally less profitable than mass-market play, it can often be a major source of revenue growth. SJM Holdings operated an average 474 tables for high rollers in the third quarter, compared with 239 compared to the same quarter of 2009.
But the results can be deceiving. RBS analyst Philip Tulk told the Wall Street Journal, “the results were slightly disappointing because sequentially they were weak against the market in terms of both VIP and mass-market revenue.” He noted that SJM’s high-roller volume grew only 1% in the third quarter compared with the second quarter, while the overall market rose 5%. In terms of mass-market business, SJM’s volume rose 3% compared with the market’s 5% gain”.