SJM Holdings reported lower-than-expected Q3 EBITDA as VIP gross gambling revenue tumbled 43 percent in the quarter.
The company reported net gaming revenue fell 3.2 percent to HK$8.05 billion ($1 billion), while EBITDA was up 3.4 percent at HK$950 million. That figure is about 3 percent below consensus estimates. VIP GGR was down 43 percent at HK$2.89 billion, while mass GGR gained 12 percent to $6.3 billion.
“In spite of challenges in the global economy, the revenues and earnings from our mass market gaming business have more than compensated for the uncertainties which are affecting VIP gaming in Macau,” said Vice-Chairman and CEO Ambrose So. “At the same time, we are completing construction of our Grand Lisboa Palace on Cotai, on which government inspection is due to begin shortly.”
Analysts at Bernstein said the company continues to suffer from a lack of presence on Cotai. However, its margins have improved due to a better mix of VIP and mass gaming.
The construction of the Lisboa Palace is nearing completion and the actual opening date will depend on the timing of pre-opening checks by the government.
The company’s overall share of Macau’s GGR was about 13.8 percent in the quarter, with VIP GGR at 11 percent and mass at 15.6 percent. That’s down from a share of 15.3 percent of the market in the same period last year.
After the end of the quarter, revenue has picked up with VIP GGR rising 53 percent during Golden Week and mass GGR up 19 percent.
During Q3. the group operated an average of 286 VIP gaming tables down from 291, 1,503 mass market gaming tables, up from 1,408 and 2,563 slot machines.