For the three months ending March 31, SJM reported revenue down 37.3% to HKD 14.3b (US $1.84b), earnings down 43.3% to HKD 1.24b ($160m) and profit down 46.5% to HKD 1b ($129m). Despite the downturn, SJM’s share of Macau’s overall gaming revenue pie slipped just 0.3 points to 22.7%. SJM ended the quarter with HKD 23b in cash and just HKD 890m of debt.
SJM’s VIP revenue fell 45.4% to HKD 7.9b. VIP hold improved nearly half a point to 3.18% from the same period last year but it wasn’t enough to overcome a whopping 54% drop in VIP turnover. The average number of VIP tables in action during Q1 was 530, down from 582 in Q1 2014. Mass market revenue fell a comparatively minor 23.9% to HKD 6b and the number of mass market tables nudged up 14 to 1,209. Slot machine and Tombola revenue fell 5.6% to HK 330m.
SJM’s flagship Casino Grand Lisboa reported revenue of HKD 5.2b while SJM’s other self-promoted casinos contributed HKD 1.7b and the 15 satellite casinos that operate under SJM’s license added HKD 7.4b.
Occupancy at the Grand Lisboa’s hotel fell 14.4 points to 81.4%. The quarter saw SJM complete its first year of construction on the new Lisboa Palace on Cotai, which remains on track to open sometime in 2017.
SJM CEO Ambrose So was a model of understatement in declaring that the negative numbers were a reflection of “challenges in the economic environment for Macau gaming.” On Monday, Macau announced a 39% fall in gaming revenue in April, the 11th consecutive month of year-on-year declines.
AMBROSE SO DENIES DEALER PURGE
Last week, So denied reports that Macau casino concessionaires were looking for ways to eliminate casino dealers who find themselves with less work as a result of Macau’s downturn. Casino labor group Forefront of Macau Gaming had claimed that SJM and other casino operators had increased the number of “warning letters” issued to casino staff for minor infractions, allegedly to build up a case for future termination.
So rejected these claims, saying that the volume of such letters issued in Q1 had actually fallen 25% from the same period last year. Regardless, analysts have suggested that the recent spate of Macau VIP room closures has resulted in an oversupply of dealers and, once made redundant, new jobs are proving increasingly harder to find. It’s a far cry from a year ago, when dealers were scarce due to local regulations that stipulate that frontline casino staff must be Macau citizens.