CASINO

SJM Holdings comes just $7m shy of $1b profit in 2013

TAGs: Macau, SJM Holdings

sjm-holdings-record-revenueMacau’s top casino operator SJM Holdings Ltd. came just $7m shy of making a billion dollars in profit in 2013, Profits rose 14.2% to HKD 7.7b (US $992.9m) as gaming revenue increased 10.2% to HKD 87b ($11.2b) and earnings rose 13.7% to HKD 8.7b. SJM maintained its status as Macau’s market leader last year, but its share of the overall revenue pie dropped to 24.8% from 26.7% in 2012.

SJM’s VIP gaming revenue rose 9.4% to HKD 58.3b, 67.1% of overall revenue, down slightly from 67.5% in 2012. At the end of 2013, SJM operated 574 VIP tables in conjunction with 38 VIP promoters, down from 587 tables and 36 promoters at the end of 2012.

Mass market table revenue was up 13% to HKD 27.2b, good for 31.3% of the total (up from 30.6%). As of Dec. 31, SJM operated 1,210 mass tables vs. 1,184 a year earlier. SJM credits the mass boost to increased visitation from the Chinese mainland and increased spending per visitor. Average daily net win per mass table rose 14.3%.

Slots and other electronic gaming revenue slipped 7% to HKD 1.4b despite daily win per machine rising 6.5%. The culprit here is the forced closure last year of two SJM slot lounges to honor Macau’s desire to eliminate gambling joints from residential areas, which pushed SJM’s total number of machines in operation down nearly a fifth to 2,880.

Profits at SJM’s flagship Casino Grand Lisboa rose 2.3% to HKD 4.3b, representing nearly 68% of SJM’s overall net income. VIP gaming revenue was up 13.6% to HKD 25.8b, nearly 80% of the venue’s overall revenue. Mass gaming fell 1.3% to HKD 6b despite the fact that average daily visits to the venue rose from 38,151 in Q1 to 40,703 in Q4. The joint’s 700 slot machines saw revenue rise 2.6% to HKD 457m.

Combined revenue at SJM’s three other self-promoted casinos was up 12.3% to HKD 12.5b, while profit rose a healthy 38.6% to HKD 1.4b. Revenue from SJM’s 14 third-party promoted casinos rose 9.6% to HKD 42.3b and profit rose 10% to HKD 1.8b.

Looking ahead, SJM is stoked at having broken ground earlier this month on its $4b Lisboa Palace integrated resort on Cotai. SJM’s first foray onto Cotai will open in 2017 with a Versailles theme because SJM CEO Ambrose So believes that theme resonates well with mainland consumers. SJM says it intends to remain focused on the Macau market, while “selectively considering opportunities” for expansion elsewhere in Asia. Earlier this month, SJM announced a joint venture with the eGame Group to launch lottery operations in five countries.

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