SJM Holdings revenue, profit and market share all fall in 2016

TAGs: Macau, SJM Holdings

sjm-casino-revenue-profits-fallMacau casino operator SJM Holdings had a 2016 to forget, with revenue, profit and market share all in full retreat.

Figures released Tuesday show SJM’s gaming revenue falling 14.5% to HKD 41.3b ($5.3b) in 2016, while earnings were off 11.5% to HKD 3.4b and profit slipped 5.6% to HKD 2.3b. SJM’s share of the overall Macau market’s gaming revenue dipped from 21.7% in 2015 to 19.1% last year.

All of SJM’s gaming verticals were in negative territory, with VIP revenue falling 20.5%, mass market tables down 8.2% and slots falling 6.4%. These compare unfavorably with the overall Macau market, which saw VIP revenue fall 6.9% while mass market revenue gained 1.8%.

SJM’s flagship Grand Lisboa property bore the brunt of the damage, with revenue down 14% to HKD 14b. VIP turnover was down only 4% but VIP revenue was off 17% as the property played unlucky. The Grand Lisboa finished 2016 with 125 VIP tables, 25 fewer than at the end of 2015.

Things were equally bleak at SJM’s other self-promoted casinos (Casino Lisboa, Casino Oceanus at Jai Alai and Casino Taipa), with revenue falling 10% to HKD 5.8b and profit tumbling 22% to just HKD 414m. SJM’s 14 satellite (third-party promoted) casinos saw similarly steep declines.

SJM CEO Ambrose So did his best to put 2016 behind him, saying the company had withstood the Macau market’s “economic challenges” and was entering 2017 “in a strong position.” (He may as well have added: ‘And now let us never speak of this again.’)

SJM is currently the only one of Macau’s six casino concessionaires whose operations are completely confined to the Peninsula region. But So said SJM’s in-development property on Cotai, the Grand Lisboa Palace, made “substantial progress” in 2016 and remained on track to finish construction by the end of the year with an opening target of H1 2018. SJM also announced that the property’s budget had increased from HKD 30b to HKD 36b ($4.6b), but offered no explanation for the cost increase.


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