Full-year 2019 profit at Macau casino operator SJM Holdings Ltd rose 12.5 percent amid gaming revenue that actually fell 1.5 percent year-on-year.
Such profit was just under HKD3.21 billion (US$401.1 million), compared to HKD2.85 billion a year earlier. Gaming revenue for 2019 was nearly HKD33.16 billion, compared to HKD33.68 billion in 2018, the group said in a Monday filing to the Hong Kong Stock Exchange after trading hours.
The firm operates its current casino hotel flagship, Grand Lisboa (pictured), on the city’s peninsula, and is still to open a Cotai property – the HKD39-billion Grand Lisboa Palace. Other self-promoted casinos include Casino Lisboa, Casino Oceanus at Jai Alai, including the casino area in the adjacent Jai Alai building, and Casino Taipa at the Regency Art Hotel. As at December 31, 16 gaming venues in Macau were managed by third parties but using the SJM Holdings’ gaming licence.
In its Monday announcement, the group said construction work on Grand Lisboa Palace, had been “completed in late 2019 and application was made for the relevant licences to begin operation in the second half of 2020”.
It also announced recommendation of a 2019 final dividend of HKD0.22 per ordinary share, totalling just under HKD1.25 billion, “subject to approval by the shareholders” at the forthcoming annual general meeting.
The group’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 13.1 percent in 2019, to just over HKD4.21 billion, from HKD3.72 billion a year before.
Ambrose So Shui Fai, chief executive of the group, was quoted saying in a press release accompanying the results: “We are pleased to report increases in adjusted EBITDA and net profit for 2019, constituting our best results in the past five years, whilst construction work was completed on Grand Lisboa Palace.”
The CEO added: “SJM has entered 2020 in a strong position to face the year’s challenges. We extend our sympathy to all who have been affected by the coronavirus, and we pledge our continued support to the Macau government in combatting its spread.”
Market share slips
SJM Holdings indicated its share of Macau-market casino gross gaming revenue (GGR) had slipped in 2019 compared to a year before.
It said in its Monday filing its slice of such GGR was 14.1 percent, including 18.2 percent of mass-market table gaming revenue and 10.4 percent of VIP gaming revenue.
For its 2018 results SJM Holdings had reported a 14.9-percent share of Macau’s gaming revenue, including 19.5 percent of mass-market table gaming revenue and 12.2 percent of VIP gaming revenue.
For the 12 months to December 31, 2019, group VIP GGR slipped 30.4 percent year-on-year, to just under HKD13.69 billion. That was on rolling chip sales that fell 37.4 percent, to HKD420.16 billion, and on a tally of VIP tables that fell 1.4 percent year-on-year to 284, from 288 calculated by the average of month-end table numbers.
VIP gaming operations accounted for 34.2 percent of the group’s total GGR in 2019, as compared with 44.8 percent in the previous year.
Full-year mass-market table GGR rose 8.9 percent year-on-year, to nearly HKD25.13 billion. The average number of mass-market gaming tables for the period – also calculated by the average of month-end table numbers – was up 4.7 percent in 2019, to 1,482, from 1,416 a year earlier.
Slot machine GGR for 2019 rose 2.5 percent from the prior year, to nearly HKD1.19 billion,. That was on an average aggregate of slot machines that actually fell 4.0 percent to 2,562, from 2,668 in 2018.
During 2019, the group’s flagship Casino Grand Lisboa had a 17.6 percent decrease in GGR, but a 12.9 percent increase in that property’s adjusted EBITDA, and a 17.3 percent rise in the property’s attributable profit.
Grand Lisboa Hotel’s occupancy rate decreased by 1.7 percentage points, to 93.8 percent for the full year, compared to 95.5 percent in 2018, whilst the average room rate for 2019 increased by 0.9 percent year-on-year to HKD1,508.
The group said that in 2019 it had maintained its “strong balance sheet”, with cash, bank balances and pledged bank deposits totalling just under HKD15.53 billion as of December 31.
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"There’s a huge amount of possibilities out there and in the case of Macau, it seems that some of these issues should be considered or we may lose the epithet of gambling capital of the world"
Macau-based lawyer and senior partner at law firm Rato, Ling, Lei and Cortés