Profit at Macau casino operator SJM Holdings Ltd rose 3.3 percent year-on-year in the first quarter of 2017, on lower gaming revenue. Such profit was HKD580 million (US$74.5 million), compared to HKD561 million in the prior-year period, the firm said in a Thursday filing to the Hong Kong Stock Exchange.
Gaming revenue of the group in the first three months of 2017 decreased by 5.3 percent year-on-year, to just under HKD10.39 billion. A total of 35.4 percent of group gaming revenue – or HKD3.68 billion – came from the casino at its flagship Macau peninsula property, Grand Lisboa (pictured).
“SJM’s first-quarter results saw a resumption of growth in mass market gaming revenue, quarter-to-quarter and year-on-year,” said a commentary from the firm’s chief executive, Ambrose So Shu Fai, in a press release issued the same day.
Mr So additionally said the performance in the higher-margin mass gaming segment had contributed to an increase for the quarter in adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) and an improvement in adjusted EBITDA margin for the period.
Adjusted EBITDA of the group in the three months to March 31 increased by 0.7 percent year-on-year, to HKD843 million. First-quarter adjusted EBITDA margin increased to 8.0 percent, from 7.5 percent in first quarter 2016.
The earnings filing said SJM Holdings’ first-quarter share of Macau gaming revenue had slipped 3.3 percentage points year-on-year, to 16.9 percent, from 20.2 percent.
The group’s first-quarter VIP gaming revenue was nearly HKD4.94 billion, a decrease of 12.0 percent from the nearly HKD5.61 billion achieved in the first quarter 2016. Mass-market gaming revenue rose 1.9 percent year-on-year in the first three months, to nearly HKD5.20 billion. Slot machine and tombola revenue combined fell 3.7 percent, to HKD257 million, from HKD267 million in the prior-year period.
The firm said that during the first quarter it operated an average of 315 VIP gaming tables (versus 369 in the first quarter 2016); 1,375 mass-market gaming tables (versus 1,298 in the prior-year period) and 2,549 slot machines (versus 2,898 in first quarter 2016).
Capital expenditure of the group during first quarter 2017 was HKD1.43 billion, which it said was “primarily for construction in progress”, understood to be a reference to Grand Lisboa Palace.
As at March 31, the group had total cash, bank balances and pledged bank deposits of HKD12.66 billion and debt of HKD503 million.
In Thursday’s release, Mr So said that the firm’s HKD36-billion Grand Lisboa Palace project on Cotai “continues to make great progress and remains on budget”.
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Analyst at Roth Capital Partners