GGRAsia – Macau op SJM sees 3Q loss widen to US$241mln

Macau op SJM sees 3Q loss widen to US$241mln

Oct 31, 2022 Newsdesk Latest News, Macau, Top of the deck

The third-quarter loss at Macau casino operator SJM Holdings Ltd widened to nearly HKD1.90 billion (US$241.4 million), from a loss of just under HKD1.25 billion in the prior-year quarter, the firm said in a Monday filing after market close, giving selected performance figures for the reporting period.

For the first nine months this year, the accumulated loss rose 71.4 percent year-on-year, to HKD4.65 billion.

Quarterly net revenue dipped 57.4 percent, to just under HKD1.03 billion. Third quarter net gaming revenue – after deducting commissions and incentives - fell by 59.9 percent year-on-year, to HKD913 million.

During the reporting period, the group’s VIP gross gaming revenue (GGR) was HKD29 million, a decrease of 91.0 percent from a year earlier. Mass-market GGR was HKD857 million, down 57.2 percent year-on-year, while slot machine GGR was HKD66 million, a decline of 52.9 percent.

The quarter had been “severely impacted by travel restrictions and quarantine requirements,” noted Ambrose So Shu Fai, SJM Holdings’ vice-chairman and chief executive, in a comments in a press release issued after the results.

Referring to a June community outbreak of Covid-19 in Macau, the CEO added that within the third-quarter reporting period “all casinos and gaming areas in Macau were closed for 12 days in July by government order”.

But he added that during the course of the current, fourth, quarter, the group would “look forward to the beginnings of gradual liberalisation of travel to Macau, to the award of the new gaming concessions, and to SJM’s commitment to a continuing presence in Macau for the long term.”

Those were references respectively to the flagged return of electronic issuance of visas for Macau trips by mainland China residents, and of group tours from the mainland; and the ongoing public tender process for new, 10-year gaming concessions in the Macau market.

In its results update, SJM Holdings said that for the three months to September 30, adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were negative by HKD968 million, compared to third-quarter 2021’s negative HKD460 million.

The group’s foray into the Cotai market, the HKD39-billion Grand Lisboa Palace (pictured), which opened at the end of July last year, generated in the third quarter this year gross revenue of HKD115 million: GGR of HKD46 million and non-gaming revenue of HKD69 million.

In the third quarter 2021, the property’s casino GGR had been HKD69 million, and non-gaming revenue HKD59 million.

After adjusting for pre-opening expenses of HKD95 million, Grand Lisboa Palace’s adjusted property EBITDA was a negative HKD227 million in the latest third quarter, compared with negative HKD176 million in the prior-year quarter.

The casino firm’s main Macau peninsula property, Grand Lisboa, generated HKD101.5 million in GGR in the third quarter, down 83.3 percent year-on-year.

As at September 30 this year, SJM Holdings had total cash, bank balances, short-term bank deposits and pledged bank deposits of just under HKD4.54 billion, and total debt of HKD26.79 billion.

The group noted it had completed a refinancing of its syndicated banking facilities, consisting of a HKD9 billion term loan and a HKD10 billion revolving credit facility, of which HKD2.9 billion was undrawn as of September 30.