The leading gambling operator SJM Holdings revealed details about company’s financial performance during H1 of the current year. The company, owned by the casino mogul Stanley Ho, posted a net profit that did not meet analysts’ expectations. In point of fact, the numbers posted were worse than expected. The sharp decline was attributed to the fact that high rollers still shy away from Macau-based casinos.
Adjusted EBITDA saw a decline of 27.8% YOY and reached HK$1.63 billion. Total revenue was HK$21.13 billion, 20.6% down YOY.
SJM used to be among the most profitable gambling spots in the once lucrative Asian gambling Mecca because of the high rollers it managed to attract. However, the opening of new casinos on Cotai Strip is considered a key reason for the decline in revenues of the already established venues.
The company released a statement on the matter and said that given the delicate economic condition of the region as well as the intensified competition and the regulatory policies SJM has to follow, the performance of SJM properties will remain unstable.
A market analyst also confirmed the statement that the SJM is experiencing a slump in revenue because its venue is located on Macau Peninsula, while tourists and players prefer the diversified gambling options Cotai offers.
Grand Lisboa Palace resort is slated to open on Cotai Strip next year, but at that time, the SJM – managed property will have to fight the fierce competition of Studio City and the Parisian.
In addition, the mass market outperformed the VIP one. The gambling revenue of the VIP room saw a sharp decline of 28.5% YOY and reached HK$10.17 billion. The mass market revenue plummeted to HK$10.19 billion, down 11.5% YOY. SJM also reduced the number of VIP tables and increased the number of gambling options mass-market players are given access to.
MGM China Holdings, co-chaired by Pansy Ho, Stanley Ho’s daughter, reported satisfactory net income for the registered period. The better-than-expected results were attributed to the engagement of more mass market players and the cost cutting measures the company officials have adopted.
Meanwhile, the gambling industry in Macau shows signs of improvement. The revenue for July was MOP17.77 billion, which is a 4.5% decline YOY. The smaller-than-expected decrease was attributed to the fact that the Macau economy no longer relies on high rollers but moved its focus to mass recreational players and tourists.
