SJM Holdings profit rises on VIP gaming

TAGs: ambrose so, Macau, SJM Holdings

sjm-holdings-macau-casinoMacau’s largest casino operator SJM Holdings Ltd. saw earnings rise 12% to HKD 2.14b ($275.9m) in Q2 2013 while profit rose to HKD 1.91b from HKD 1.7b in Q2 2012. Last month, SJM chairman Ambrose So had teased the media about the double-digit profit growth expected in the company’s H1 filing with the Hong Kong stock exchange, and he didn’t disappoint. Overall group revenue over the first six months of 2013 was up 8.1% to HKD 42.4b – of which gaming revenue accounted for HKD 42.13b – while earnings rose 11.6% to HKD 4.3b and profit rose 12.2% to HKD 3.83b ($493.9m).

Last month, So claimed that Macau’s VIP gamblers were switching over to so-called ‘premium mass’ tables, yet SJM’s H1 mass market revenue grew 3.9% to HKD 12.2b while VIP gaming was up 10.4% to HKD 29.2b. (May have had something to do with Macau regulators reclassifying a swathe of premium mass tables at SJM’s flagship Casino Grand Lisboa as VIP tables.) Meanwhile, slot machine revenue actually fell 5.7% to HKD 725.4m. SJM continues to be top dog in terms of Macau market share, holding 25.8% of mass market gaming and 26% of VIP action, for an overall share of 25.3%, down from 27% in H1 2012.

VIP gaming accounted for 69.4% of SJM’s group revenue, up from 67.9% last year. VIP turnover rose 3.4% to HKD 919b, while average daily net-win per VIP table rose 2.9% to HKD 244.6m thanks to hold rate rising to 2.93% from 2.85%. As of June 30, SJM operated 656 VIP tables with 35 VIP promoters, compared with 587 tables and 36 promoters as of Dec. 31.

Mass market table gaming accounted for 29.8% of group revenue, down from 30.1% last year. Average daily net-win per mass table rose 9.2% to HKD 60.4m. As of June 30, SJM operated 1,103 mass tables, down from 1,184 as of Dec. 31.

Slots accounted for just 1.7% of SJM’s total gaming revenue, down from 2% last year. The decrease in slots revenue was largely the result of an 8.2% decrease in the number of machines in use. SJM’s Treasure Hunt slot hall, which contained 123 machines, suspended operations on May 24. SJM had 3,417 machines in use as of June 30, down from 3,532 in December and its share of overall Macau slot revenue fell to 10.6% from 12% in H1 2012.

Looking ahead, SJM expressed optimism about the second half of the year, keeping in mind its susceptibility to “the overall economic performance of the surrounding region.” SJM is also forging ahead with its plans to develop its first casino on Cotai, where Macau’s other five concessionaires have already established a presence. While SJM’s Cotai allocation is a mere 70.4k square meters – the smallest of all Cotai properties – So told Macau Business Daily that SJM continues to negotiate with SJM executive director Angela Leong On Kei about teaming SJM’s allocation with her neighboring 180k square meter property to create a proper base on which to plant SJM’s Cotai flag.


views and opinions expressed are those of the author and do not necessarily reflect those of