GGRAsia – SJM loss US$530mln in 2021, ramps up new Cotai venue

SJM loss US$530mln in 2021, ramps up new Cotai venue

Feb 28, 2022 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator SJM Holdings Ltd widened its full-year loss in 2021, but saw some uptick in gross revenue from its new Cotai resort, Grand Lisboa Palace (pictured), the group said in a Monday filing to the Hong Kong Stock Exchange.

The full-year loss was HKD4.14 billion (US$530.3 million) versus a loss of HKD3.03-billion in full-year 2020, amid disruption to tourism and travel linked to the Covid-19 pandemic..

SJM Holdings also said in a press release that on Monday the group had extended until February 28, 2023, the maturity of its syndicated banking facilities, originally consisting of a HKD15-billion term loan; and a HKD10 billion revolving credit facility, of which HKD13.3 billion was outstanding.

“The group expects to complete a refinancing of these facilities within the coming quarter,” it added.

In its results filing, SJM Holdings said the board did not recommend any payment of final dividend for the year ended December 31.

Gross revenue of Grand Lisboa Palace was HKD370 million, comprising gross gaming revenue (GGR) of HKD200 million. After adjusting the pre-opening expenses of nearly HKD1.03 billion, its adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) was negative by HKD423 million.

“Grand Lisboa Palace revenue improves but costs rise more,” said analyst Vitaly Umansky of brokerage Sanford C. Bernstein Ltd in a Monday note.

“During 2021, SJM achieved annual increases in business volumes, although subject to the challenges of the pandemic for the full year,” stated Ambrose So Shu Fai, the group’s vice chairman and chief executive, in comments in the press release accompanying the results.

The HKD39-billion Grand Lisboa Palace – which opened on July 30 – had reported total gaming revenue of HKD69 million for the three months to September 30.

Across the group for 2021, net gaming revenue rose 31.5 percent year-on-year, to nearly HKD9.61 billion, as the amount paid in commissions and incentives declined 21.7 percent. The group’s EBITDA loss narrowed 24.3 percent in 2021, to HKD1.58 billion.

SJM Holdings was “the only Macau gaming operator” not to have “achieved EBITDA break-even” since mainland Chinese visitors returned to the city in meaningful volume, in “September 2020”, stated Sanford Bernstein’s Mr Umansky.

SJM Holdings said it had a 12.3 percent share of Macau’s gross gaming revenue in 2021, including 16.3 percent of mass-market table gaming revenue and 4.9 percent of VIP gaming revenue.

In 2020, it had claimed 14.1 percent of Macau GGR, including 19.7 percent of mass-market table gaming revenue, and 8.0 percent of VIP gaming revenue.

The group, whose main Macau peninsula operation is Hotel Grand Lisboa and its casino, saw company-wide 2021 GGR rise 25.3 percent year-on-year, to HKD10.37 billion. Revenue in the VIP segment fell 33.3 percent year-on-year, to just under HKD1.36 billion last year.

Mass-market table GGR rose 44.6 percent, to HKD8.47 billion. The 2021 revenue from slot machine and other gaming operations, went up 41.6 percent year-on-year, to HKD537.1 million.

Grand Lisboa’s gross revenue was HKD2.32 billion in 2021, including GGR of HKD2.15 billion.

As of December 31, the group had just under HKD3.35 billion of cash, bank balances, short-term bank deposits and pledged bank deposits; and just over HKD22.57 billion of debt.

(Updated 8.40am, Mar 1)