SJM records 16.5 profit drop, below expectations

Macau casino operator SJM Holdings reported a 16.5 percent decrease in profit in 17Q3, below market expectations.

Said profit amounted to HK$428 million. Adjusted EBITDA for the group fell 10.4 percent to HK$726 million.

It however, posted a small increase in gaming revenue for the third quarter of 2017, reaching HK$10 billion, an increase of 0.6 percent.

In regards to gaming performance SJM said it saw a rise in VIP revenue in the quarter, recording an increase of 7.4 percent. Mass market gaming revenue however fell 4.6 percent in the same period.

Bernstein said both mass and VIP results were disappointing relative to overall market growth in 17Q3 – with share loss evident in both segments.

Its flagship casino, the Grand Lisboa saw its gaming revenue rise 19.3 percent in the quarter, reaching HK$3.7 billion.

Union Gaming analysts noted that the partially opened Jai Alai casino continued to be a drag on earnings given that the property is staffed up but still waiting approvals to open the hotel and F&B portions of the property.

SJM said construction of the Grand Lisboa Palace, the group’s integrated resort on Cotai, continued in 17Q3 but was adversely affected by category 10 Typhoon Hato in August and a fire incident in September.

SJM said it is aiming to complete the project by the end of 2018 on budget and will conduct a “detailed assessment on the overall schedule of the project and will inform the market as and when appropriate.”

Dr. Ambrose So, chief executive officer of SJM Holdings Limited, commented, “Led by our flagship Grand Lisboa, our gaming revenue, adjusted EBITDA and net profit showed a sequential-quarter increase in the third quarter. In spite of Typhoon Hato and other events that affected our Grand Lisboa Palace project in the third quarter of 2017, the effects of which are still being assessed, we are working full speed on construction of the project in Cotai with full confidence in the future of our business and Macau.”


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