International edition
October 19, 2021

1H 2017

Macau casino operator SJM profit declines

Macau casino operator SJM profit declines
The company said net profit for the first six months of this year declined by 12.9 percent to US$122.3 million from US$ 140.8 million a year ago. It said adjusted earnings before interest, taxes, depreciation and amortisation, a measure of profitability,
Macau | 08/02/2017

The company said net profit for the first six months of this year declined by 12.9 percent to US$122.3 million from US$ 140.8 million a year ago. It said adjusted earnings before interest, taxes, depreciation and amortisation, a measure of profitability, fell 7.7 percent to US$ 192 million from US$ 204.8 million a year ago, while total revenue declined by 1.9 percent to US$ 2.6 billion.

T

he SJM figures came as casinos in the world’s biggest gambling hub extended a one-year winning streak with monthly revenue rising 29 per cent in July due to a resurgence in spending by wealthy punters and increased numbers of tourists.

 Gambling revenue reached US$2.86 billion in July, official data showed on Tuesday. That compared with analyst estimates of 27 to 30 per cent growth, Macau’s Gaming Inspection and Coordination Bureau, the highest since February 2014.

 SJM said revenue from its mass market tables dropped by 0.5 per cent, while VIP-room gaming revenue declined by 3.4 per cent during the same period. The Macau Peninsula-based casino cut its interim dividend to US$ 0.64 per share from US$ 0.76 cents per share in 2016. SJM operates 19 casinos and two hotels in the Chinese special administrative region bordering Hong Kong.

 Its results came as a surprise to many, as the overall market sentiment in the region had begun to improve as the tourism sector on the mainland started to gather pace in 2017. Brokerage firm CLSA had in a recent report said that the gaming, cosmetics, luxury and online sectors were the major beneficiaries of the “Chinese tourism boom”.

Angela Han, an analyst with China Merchants Securities, expects SJM to report a better performance during the third quarter. “In general, our forecast for SJM’s third quarter profit is positive as the overall environment in Macau is recovering. The only risk that might weigh on the group’s profit is the suspension of its Grand Lisboa Palace project.”

The HK$36 billion Grand Lisboa – SJM’s integrated resort on Cotai – is currently under a government-ordered shutdown after the death of a mainland worker at the site on June 18.

Originally expected to start greeting guests in the first half of 2018, SJM said the opening date will now be pushed back to the second half of the year. “It will be a huge uncertainty for SJM’s future performance,” said Han.

 The group maintained a strong financial position with cash, bank balances and pledged bank deposits of US$ 1,26 million by the end of June this year.

 SJM, however, sounded a note of caution. It said performance during the next six months of the year is closely linked to the overall economic performance of the region, government regulatory policies, and the level of visitation to Macau, as well as the competitive situation among casino operators in Macau. But it still remains “optimistic about its performance for the rest of the year.

The company’s Hong Kong traded shares closed 0.6 per cent down yesterday to US$ 9,98.

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