Macau-based gaming operator SJM Holdings Ltd on Monday reported a year-on-year drop in profit of 46.5 percent in the first quarter of 2015, to HKD1.00 billion (US$129 million). The decrease was mainly caused by a 37.3 percent decline in gaming revenue, the firm said in a press release.
SJM Holdings recorded gaming revenue of HKD14.28 billion in the first three months of 2015, according to selected unaudited results released by the firm. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were HKD1.24 billion, a year-on-year decline of 43.3 percent.
Adjusted EBITDA margin decreased to 8.6 percent in the period from 9.5 percent in the first quarter of 2014.
SJM Holdings said its decrease in gaming revenue “was in line” with the overall market trend. Market wide in Macau, accumulated gross gaming revenue (GGR) for the first three months of 2015 stood 36.6 percent lower than in the same period in 2014, according to official data.
“Challenges in the economic environment for Macau gaming persisted in the first quarter of 2015,” the firm’s chief executive, Ambrose So Shu Fai, said in a statement.
He added: “With an optimistic view of the future of Macau, however, SJM is committed to maintaining our leadership position that we have established on Macau Peninsula whilst proceeding ahead with construction of the Lisboa Palace on Cotai for completion in 2017.”
The latter was a reference to a new HKD30-billion casino resort being built by SJM Holdings in the Cotai district. Currently the firm has no presence there.
During the first quarter of 2015, the group’s VIP gaming revenue was HKD7.92 billion, a decrease of 45.4 percent from HKD14.51 billion one year before. The group operated an average of 530 VIP gaming tables during the period, down from 582 in the first three months of 2015.
Mass market gaming revenue for the period amounted to HKD6.05 billion, a year-on-year decrease of 23.9 percent, while slot machine and tombola revenue was HK$311 million, down by 5.6 percent. The company operated an average of 1,209 mass market gaming tables during the period, 14 more than one year earlier.
First quarter mass GGR market wide in Macau, including slots and electronic table games, fell by 27.0 percent year-on-year, according to official data. VIP baccarat GGR market wide fell 42.1 percent in the quarter.
The performance of SJM Holdings’ non-gaming operations was also softer in the first three months of 2015. The group reported HKD158 million in non-gaming revenue, including hotel, catering and related services, down from HKD173 million in the first quarter of 2014.
SJM Holdings was the fourth of Macau’s six casino operators to announce its results for the first quarter of 2015, with Sands China Ltd, Wynn Macau Ltd and Galaxy Entertainment Group Ltd operations also strongly hit by the ongoing slowdown in gaming. Macau has already recorded 11 consecutive months of year-on-year decline in monthly the city’s month GGR tally.
MGM Resorts International, parent of Macau casino operator MGM China Holdings Ltd, is to present its results on Monday (May 4). Melco Crown Entertainment Ltd closes the reporting season for Macau gaming operators, with its earnings report scheduled for Thursday.
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