Analysts from CBRE Equity Research pointed out that SJM Holdings has improved its operation results thanks to reduced costs in satellite casinos and upgrades in its main properties.
The gaming operator announced its financial performance for the second quarter of 2024, with company losses narrowed by 87.2 percent, from HK$1.26 billion ($162 million) in 1H23 to HK$162 million ($20.8 million) in the first half of 2024.
SJM also reported a 20 basis point increase in its overall gross gaming revenue (GGR) market share, reaching 12.6 percent.
According to CBRE analysts, this growth is attributed to improved cross-selling and operational synergies facilitated by the company’s “One SJM” platform.
‘Management indicated that market share continued to expand in July, rising to 13.5 percent, with expectations for sustained growth throughout the second half of the year’, the brokerage added.
SJM’s satellite casinos reported GGR of HK$2.6 billion ($338 million) in 2Q24, slightly surpassing expectations. More notably, Property EBITDA became positive, contributing HK$23 million ($3 million) for the quarter.
SJM operates nine satellite casinos, including Casino Casa Real, Casino Landmark, Casino Emperor Palace, and Casino Grandview.
‘This marks the first period of EBITDA profitability since the onset of the pandemic, significantly outperforming prior loss estimates’, the dispatch indicated.
The improvement is largely attributed to reduced staffing costs, which decreased from a daily run rate of HK$1.1 million ($143,000) in 1Q24 to HK$0.6 million ($78,000) in 2Q24.
The Grand Lisboa Palace (GLP) has also shown significant momentum, with mass market GGR climbing 22 percent sequentially to HK$750 million ($97 million).
The property achieved an EBITDA margin of 8.6 percent, resulting in HK$104 million ($13.5 million) of Property EBITDA.
‘The addition of four new casual dining establishments has contributed to increased foot traffic, while an expanded sales team is actively seeking to attract more premium customers’, read the CBRE dispatch.
GLP’s total GGR market share grew by 20 basis points to 2.2 percent, with a further increase of 30 basis points in July, bringing it to 2.5 percent.
Management plans to open two additional casual restaurants and a food court in the latter half of 2024, which may slightly raise operational expenses but is expected to enhance revenue and drive margin expansion.
SJM is also focusing on renovations at the Grand Lisboa (GL), including the introduction of more casual dining options in 2H24, converting junket areas into hotel rooms, and increasing retail space slated for 2025.
With GL currently operating at full occupancy, the addition of more rooms is anticipated to generate additional revenue and further improve margins. A new VIP gaming area opened in 2Q24 has already contributed to increased VIP GGR in July.
