SJM’s profit jumps 27 % and plans Special Dividend

The company, founded by casino mogul Stanley Ho, owns 20 of the 35 casinos in Macau and faces intensifying competition as rivals including Sands China and Galaxy Entertainment Group expand. SJM won a land grant in October to build its first casino resort in the Cotai area, a piece of reclaimed land in Macau that is Asia’s equivalent of the Las Vegas Strip. “SJM’s market share remained steady and was gradually improving,” in the fourth quarter, wrote Kenneth Fong, a Hong Kong-based analyst at JPMorgan Chase & Co. ahead of the earnings announcement.

Full-year adjusted earnings before interest, tax, depreciation and amortization, or Ebitda, rose 10 percent to us$ 979.6 million. The company proposed a special dividend of 30 Hong Kong cents a share, on top of a final dividend of 50 Hong Kong cents a share. SJM stock climbed 12 % this year, outperforming the benchmark Hang Seng Index which is down less than 1%.

Gambling revenue
Macau’s casino revenue climbed 14 % to a record us$ 38 billion in 2012. SJM’s gambling revenue for the year also climbed 4.5 % to us$ 10.1 billion. The former Macau gaming monopoly’s revenue from VIPs, or high rollers, rose to us$ 6.87 billion from us$ 6.80 billion a year ago, mass market revenue increased 13 % to us$ 3 billion. Slot-machine revenue also rose to us$ 193.3 million.

Sands earlier said it plans to invest at least us$ 2.5 billion to build its fifth resort, to be called the Parisian, in Macau, the only city in China where casino gambling is legal. The Parisian will have a replica of the Eiffel Tower and family- oriented facilities to attract family-oriented gamblers from China.
Smaller competitors such as Wynn Macau and MGM China have also been given approval to develop a casino in Cotai.