he casino operator this week reported an 81.4% year-on-year decrease in net profit for the 2015 third quarter to HK$285 million (USD 36.8M).
The decrease, however, includes an impairment loss on an available-for-sale equity investment in Macau Legend of HK$250m during the three month period ended September 30. Excluding this, the profit would have fallen by a still sizable 65pc to HK$535m over the previous year. Profit was down 61.8pc year-on-year for the first nine months of 2015.
With eighteen casinos in Macau that have catered to Chinese high rollers for decades, profits across the SJM Group have suffered dramatically. Macau’s Gaming Inspection and Coordination Bureau this week reported the seventeenth consecutive month of declining revenues in the market and resignment of their chief regulator.
Mainly led by weakness in the VIP junket segment, reported the Company, gaming revenue of the Group was down 6.6pc quarter-on-quarter and 37.9pc year-on-year to HK$11.2bn in the third quarter. Gaming revenue at SJM’s flagship Casino Grand Lisboa decreased 48.5pc to HK$3.5bn over the prior-year quarter and EBITDA reduced 49.2pc at the property.
VIP gaming revenue was down 47.5pc to HK$5.4bn across the Group’s eighteen casinos, compared to HK$10.4bn in the 2014 third quarter. Mass market gaming revenue was also down, falling 24.9pc year-on-year to HK$5.5bn, with slot machine revenue down 23.8pc to HK$272m. Total VIP chip sales was HK$160bn and VIP gaming hold percentage was 3.36pc.
Gaming revenues across SJM’s properties accounted for 21.3pc of the Macau gaming market during the 2015 third quarter, compared to 22.5pc during the same period in 2014. The Group maintained a strong and liquid financial position with HK$17.9bn in cash, bank balances and pledge bank deposits, and HK$760m of debt as of September 30, 2015.
Dr. Ambrose So, SJM Holdings CEO, said: “While challenging conditions in Macau’s gaming market continued in the third quarter. SJM is making progress in controlling costs and enhancing customer service. Our strong balance sheet positions us well for the Lisboa Palace project, which remains on schedule and on budget, and we remain optimistic about the future.”