GGRAsia – SJM EBITDA loss of US$394mln in 2022, revenue down 34pct

SJM EBITDA loss of US$394mln in 2022, revenue down 34pct

Mar 08, 2023 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator SJM Holdings Ltd reported negative adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of nearly HKD3.10 billion (US$394.3 million) for full-year 2022. That compared with an EBITDA loss of HKD1.58 billion in the previous year, according to a Wednesday filing to the Hong Kong Stock Exchange.

Group-wide revenue stood at HKD6.68 billion in full-year 2022, down 33.7 percent from the prior year. Net gaming revenue fell by 36.6 percent year-on-year, to HKD6.09 billion.

The firm reported revenue from VIP gaming operations of HKD486.3 million in 2022, down 64.2 percent from the previous year. Revenue from mass-market table gaming operations declined 34.5 percent year-on-year, to HKD5.55 billion, while that for slot machines stood at HKD416.3 million, down 22.5 percent from 2021.

SJM Holdings confirmed a loss attributable to its owners of HKD7.80 billion, up 88.2 percent from 2021. The company had flagged on Monday the expected net loss for 2022, which it said included an impairment charge related to a “reassessment and rationalisation” of the group’s “core” casino business.

The firm said it had made an impairment charge of just under HKD1.21 billion for financial year 2022, including: the “cost of refurbishments” to the Jai Alai building, so that the complex “could be operated as a casino”; and a HKD4.7 million charge “relating to the closure of five third-party owned casinos and two self-promoted casinos”.

Daisy Ho Chiu Fung, chairman of SJM Holdings, said in comments in the press release accompanying the results that the group had “proven” its “resilience despite the challenges” brought about by the Covid-19 pandemic in 2022.

“Since the lifting of pandemic restrictions in January, SJM experienced an encouraging recovery in tourist visitation and patronage unleashed from latent demand, particularly over the Chinese New Year,” she stated. “This is testament to the strength of the Lisboa brand and our tireless improvement efforts over the pandemic-stricken years.”

Ms Ho also said that the HKD39-billion Grand Lisboa Palace (pictured) – which opened in July 2021 – would “launch new attractions in 2023,” which would help the group “achieve a further uptick in profitability driven by synergy and cross-promotions”.

Gross revenue at Grand Lisboa Palace was HKD687 million, including gross gaming revenue (GGR) of HKD346 million, as compared with HKD200 million in GGR in 2021. After adjusting for pre-opening expenses of HKD453 million, the venue’s adjusted property EBITDA was a negative HKD969 million in 2022, compared with a negative HKD423 million in the prior year.

Hotel Grand Lisboa and its casino, the group’s main Macau peninsula operation, achieved gross revenue of nearly HKD1.20 billion, including GGR of HKD1.07 billion, the latter down 50.4 percent year-on-year. Adjusted property EBITDA was a negative HKD758 million, compared with a negative HKD522 million in 2021.

SJM Holdings had HKD8.01 billion of cash, bank balances, short-term bank deposits and pledged bank deposits, and HKD31.78 billion of debt as of December 31, 2022.

In June last year, the group completed a refinancing of its syndicated banking facilities, consisting of a HKD9 billion term loan and a HKD10 billion revolving credit, which was fully drawn as of end-December.