Although SJM managed to achieve a market share gain 3.8% for 2Q22, largely from satellite casinos, the operator reported a widened loss of HK$702mm, still better than consensus, leading brokerage Bernstein writes.
The widened quarterly loss was due to China and Macau COVID outbreaks and tightened travel restrictions that led to a constrained market GGR in 2Q22, the brokerage notes.
Bernstein underlines that only SJM’s self-promoted properties saw EBITDA loss narrowed, but offset by worsened performance from Grand Lisboa and GLP.
To date, SJM is still the only Macau gaming operator not having achieved EBITDA break-even since Chinese visitation into Macau resumed in September 20, the brokerage reiterates.
SJM’s overall GGR market share was 18.5% in 2Q22 (+3.8% from 14.7% in Q1; higher than ~14% in 2019) lifted by satellites and mass market share increase.
2Q22 OPERATING HIGHLIGHTS
SJM Holdings reported net gaming revenue earned at HK$3,811 million in the first half of 2022, as compared with HK$5,076 million in the first half of 2021.
Adjusted EBITDA of the Group was negative HK$1,176 million, as compared with negative HK$510 million in the first half of 2021.
Loss attributable to owners of the Company was HK$2,757 million, as compared with a loss HK$1,466 million in the first half of 2021.
SJM had a 16.0% share of Macau’s gaming revenue, including 20.1% of mass market table gross gaming revenue and 5.8% of VIP gross gaming revenue.
The Grand Lisboa Palace, the Group’s integrated resort on Cotai, opened its doors to the public on 30 July 2021. Gross revenue of Grand Lisboa Palace was HK$417 million, including gross gaming revenue of HK$231 million and non-gaming revenue of HK$186 million. After adjusting the pre-opening expenses of HK$250 million, its Adjusted Property EBITDA was negative HK$483 million.
Grand Lisboa’s gross revenue was HK$776 million, including gross gaming revenue HK$705 million and non-gaming revenue HK$71 million, as compared with gross gaming revenue HK$1,198 million and non-gaming revenue HK$80 million in the first half of 2021, whilst its Adjusted Property EBITDA was negative HK$374 million, as compared with negative HK$216 million in the first half of 2021.
Grand Lisboa Palace Resort’s occupancy rate was 34.3% and average room rate was HK$920.
Hotel Grand Lisboa’s occupancy rate decreased by 14.6% from the first half of 2021 to 47.8%. Average daily room rate decreased during the period by 9.3% to HK$643.
The Group had HK$2,405 million of cash, bank balances, short-term bank deposits and pledged bank deposits and HK$26,023 million of debt as at 30 June 2022.
On 20 June 2022 the Group completed a refinancing of its syndicated banking facilities, consisting of a HK$9 billion term loan and a HK$10 billion revolving credit.