Macau casino operator SJM Holdings posted improved profits in Q3, despite year-on-year declines in both VIP gaming turnover and win rate.
Figures released Tuesday show SJM’s gaming revenue hitting just under HKD 10b (US $1.29b) in the three months ending September 30, a fall of 11% from the same period last year. SJM’s share of Macau’s overall gaming revenue fell to 18.7% from 21.3% in Q3 2015.
SJM’s earnings were down 8.4% to HKD 810m while profit improved 80.2% to HKD 513m thanks to the absence of some significant impairment charges in Q3 2015. For the first nine months of 2016, gaming revenue is off 17.8%, earnings are down 22.3% and profit fell 22.4%.
VIP gaming turnover in Q3 was down only 5% year-on-year to HKD 152b but VIP revenue slipped 19.1% to HKD 4.4b thanks to win rate falling from 3.36% in Q3 2015 to 2.89%. SJM’s total number of VIP tables fell from 458 to 323 over the same period.
Mass market revenue was also down, albeit by a more moderate 3.8% to HKD 5.5b. Slots and Tombola revenue was flat at HKD 272m while non-gaming revenue dipped 5% to HKD 131m. Occupancy at SJM’s flagship Grand Lisboa Hotel rose 6.2 points to 91.2% thanks to a 13.6% reduction in average room rates.
Tuesday marked the official end of SJM’s Tombola operations, a game similar to bingo. SJM’s Tombola operation reportedly generated gross revenue of only around US $100k in H1 2016, and with the lease expiring on SJM’s Tombola hall on November 1, the company has apparently decided enough is enough. The closure likely means Macau has seen the last of this once highly popular game.
SJM CEO Ambrose So Shu Fai was quick to note that Q3 gaming revenue may have fallen year-on-year but represented an improvement over Q2’s numbers, which So credited to the mass market sector and the “stabilizing” of Macau’s overall casino market.
SJM continues to boast one of the most robust balance sheets in all of gaming, with cash and equivalents of nearly HKD 14b versus total debt of just HKD 588m. The company spent HKD 1.9b in Q3, primarily on construction of the company’s new Grand Lisboa Palace property on Cotai. The Palace, the last major Macau casino expansion project in the works, is expected to open in early 2018.
