Macau casino operator SJM Holdings reported a rare net loss in the first quarter of 2020 as its operations were “severely impacted” by the COVID-19 pandemic.
Figures released Tuesday by the Hong Kong-listed SJM show the company generated revenue of HK$3.48b (US$448.8m) in the three months ending March 31, a nearly 60% fall from the same period last year.
Net gaming revenue was down a similarly dire percentage to HK$3.4b, while adjusted earnings tumbled 118.6% to -HK$200m and SJM booked a net loss of HK$409m versus a profit of HK$850m one year ago.
Like all Macau casino operators, SJM has been laid low by the COVID-19 pandemic, which has reduced Macau’s tourist visitation to almost nothing. Average occupancy at SJM’s Grand Lisboa Hotel was only 35.3% in Q1, down from nearly 95% a year ago.
The reopening of Macau casinos after their 15-day shutdown in February featured significantly reduced gaming capacity, as evidenced by SJM’s average number of VIP tables in action during Q1 (218, down from 280 in Q1 2019), with similarly outsized reductions in mass tables (933, down from 1,410), and slot machines (1,595, down from 2,594).
As a result, SJM’s VIP gambling revenue fell nearly 70% to HK$1.2b, as VIP turnover fell 72.3% to HK$34b. Mass market table revenue was off 58% to HK$2.6b and slots fell 51.6% to just HK$141m. If there’s one upside, it’s that the VIP slump resulted in commissions to junket operators falling by nearly three-quarters to HK$536m.
Compounding the declines, SJM’s once-dominant share of Macau’s overall casino gaming revenue continues to shrink, falling 0.8 points year-on-year to 13.3% in Q1.
SJM warned that the COVID-19 outbreak would continue to impact its performance “in 2020, and possibly beyond,” with the scale of that impact dependent on factors well outside SJM’s control. As such, the company’s fortunes for the foreseeable future “cannot be reasonably estimated.”
As if it didn’t have enough problems at present, SJM’s workforce was laid low by a major case of food poisoning last weekend. Some 53 staff, who toil at four different SJM-licensed casinos, reported symptoms related to a gastroenteritis infection, with some requiring hospitalization. The infection is believed to have originated at a common employee catering area.
