GGRAsia – SJM 1Q loss US$111mln, adjusted EBITDA turns positive

SJM 1Q loss US$111mln, adjusted EBITDA turns positive

May 15, 2023 Newsdesk Latest News, Macau, Top of the deck

The first-quarter loss at Macau casino operator SJM Holdings Ltd declined by 32.2 percent year-on-year, to HKD869 million (US$110.9 million), versus a HKD1.28-billion loss in the first three months of 2022.

First-quarter 2023 adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) stood at HKD31 million, compared with a negative figure of HKD474 million in the same period a year earlier, the firm said in unaudited highlights filed with the Hong Kong Stock Exchange on Monday.

“After several years facing challenges caused by the pandemic, SJM has turned an important corner by returning to positive adjusted EBITDA,” stated Daisy Ho Chiu Fung, chairman of the group, in comments cited in a press release issued shortly after the results announcement to the bourse.

Group-wide total net revenue rose by 57.6 percent year-on-year, to HKD4.00 billion in the three months to March 31. First quarter net gaming revenue rose by 57.7 percent year-on-year, to almost HKD3.71 billion.

During the first three months this year, SJM Holdings’ VIP gross gaming revenue (GGR) was HKD201 million, a decrease of 41.6 percent year-on-year.

Mass-market GGR – excluding slot machines – was just under HKD3.44 billion, an increase of 67.0 percent year-on-year. Slot GGR was HKD252 million, up 81.3 percent from the prior-year period.

“Our revenues from both gaming and non-gaming activities showed important gains during the quarter, and we expect that our team’s efforts will pay off further in future, especially as our Grand Lisboa Palace resort with all of its features ramps up into a growing market,” said Ms Ho. “As early results for the second quarter of 2023 indicate, we are justifiably optimistic about the future of SJM.”

Gross revenue at the group’s Cotai resort, Grand Lisboa Palace, jumped by 74.9 percent to HKD474 million in the initial three months of 2023.

Grand Lisboa Palace’s first-quarter casino GGR was HKD310 million, up 98.7 percent year-on-year, while non-gaming revenue amounted to HKD164 million, increasing by 42.6 percent. The resort’s adjusted property EBITDA however worsened: it was negative by HKD230 million in the first quarter of 2023, compared to negative HKD216 million a year earlier.

The property’s Palazzo Versace Macau luxury hotel began welcoming guests last month. Previous corporate materials from SJM Holdings had mentioned the Versace-branded hotel as having a capacity of 270 rooms.

The group’s main casino hotel on Macau peninsula, Grand Lisboa, had first-quarter gross revenue of HKD992 million, via HKD928 million in GGR and non-gaming revenue of HKD64 million, as compared with HKD551 million in GGR and non-gaming revenue of HKD41 million in the first quarter of 2022.

Grand Lisboa’s adjusted property EBITDA was HKD156 million, compared with negative HKD128 million in the first quarter last year.

The group had nearly HKD4.78 billion in cash, bank balances, short-term bank deposits, and pledged bank deposits. Debt stood at slightly below HKD28.52 billion as of March 31.

SJM Holdings announced in April that its vice-chairman and chief executive, Ambrose So Shu Fai, is to retire next month, after 21 years linked to the group.

Moody’s Investors Service said in a note published in late March it expected SJM Holdings’ earnings “to increase significantly over the next two to three years, following the removal of quarantine restrictions for travellers from China in early January this year.”