SJM Holdings saw revenue from its new Grand Lisboa Palace improve in 4Q21, but its results were still below analysts’ expectations and it remains the only operator not to have returned to profit on an EBITDA level since Chinese visitation resumed in September 2020.
The company reported an EBITDA loss of HK$611 million for the quarter, compared with the market consensus for a loss of $422 million. Adjusted for low hold, EBITDA would have been $538 million, some 22 percent below consensus, according to Bernstein.
For 2021 as a whole the loss also widened, though business volumes improved, helped by the Grand Lisboa Palace resort, which opened last July.
The loss attributable to owners of the company was HK$4.14 billion ($530 million), compared with $3.02 billion the prior year. Net gaming revenue was $9.6 billion, up 31.5 percent.
“During 2021 SJM achieved annual increases in business volumes, although subject to the challenges of the pandemic for the full year, said SJM vice-chairman and CEO Ambrose So. “Since 30 July our Grand Lisboa Palace Resort has been welcoming patrons with a premium array of new attractions. Looking forward to the post-pandemic world, SJM expects to continue playing a key role in the development of Macau as a world center of tourism and leisure.”
Grand Lisboa Palace, which cost $38.2 billion to build, generated revenue of $370 million. Gross gambling revenue was $200 million and non-gaming revenue came in at $170 million. However, the EBITDA loss at the property widened to $247 million in 4Q21, compared with $176 million in 3Q21.
Bernstein said management is being cautious about rolling out new openings at the property and as a result, the debut of the Versace Hotel, which had been scheduled for 2Q22 may be delayed due to the ongoing Covid crisis in Hong Kong and outbreaks in Guangdong.
SJM opened the Karl Lagerfeld hotel in December.
“Although management expect the high-end non-gaming offerings will drive more premium mass customers to GLP, they admitted that the property will not achieve EBITDA breakeven until IVS visas are back to normal and Hong Kong reopens travel,” Bernstein said.
The hotel occupancy rate for the resort was 48.7 percent with an average room rate of $914 million.
The group’s Macau peninsula property, the Grand Lisboa, had gross revenue of $2.32 billion, with gross gambling revenue coming in at $2.15 billion. Gross gambling revenue in 2020 was $2.06 billion.
Occupancy at the Grand Lisboa Hotel increased by 40.9 percent to 58.8 percent for the full year, though the average room rate dropped by 56.2 percent to $706 million.
SJM said it had a 12.3 percent share of Macau’s gross gambling revenue at the end of the year, with 16.3 percent of the mass market.
