Local gaming concessionaire SJM Holdings Ltd. posted a drop of 5.6 per cent year-on-year in its 2016 annual net profit, amounting to HK$2.33 billion (US$290.1 million), according to a company filing with the Hong Kong Stock Exchange yesterday.
The gaming operator’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 11.5 per cent to approximately HK$3.4 billion.
The company’s total revenue amounted to HK$41.8 billion for the year, down 14.5 per cent, as that derived from gaming dropped by 14.5 per cent year-on-year to some HK$41.3 billion. However, revenue generated from hotel, catering and other non-gaming sectors grew by 27.3 per cent year-on-year to HK$765 million.
In terms of gaming segment, the corporation saw declines in all VIP, mass market and slot machine markets.
The company’s VIP revenue plunged by 20.5 per cent year-on-year to HK$19.9 billion compared to HK$25.1 billion in 2015. In addition, the VIP sector saw a decrease in its chips sales of 14.9 per cent, amounting to HK$658 billion.
Mass market revenue experienced a decline of 8.2 per cent in 2016 to HK$20.3 billion, vis-à-vis HK$22.1 billion in 2015, while revenue from slot machines dipped 6.4 per cent year-on-year to HK$1.7 billion.
As at the end of 2016, a total of 315 VIP gaming tables were operational with 20 VIP promoters in SJM’s properties, down by 71 tables and 1 promoter compared to 2015. Meanwhile, SJM operated a total of 1,301 mass market gaming tables and 2,132 slot machines as compared to 1,247 mass tables and 2,645 machines one year ago.
Meanwhile, the company’s flagship property Grand Lisboa saw total revenue drop by 14 per cent year-on-year to HK$14.1 billion. VIP revenue from the property fell by 16.9 per cent year-on-year to HK$9.1 billion, while mass table revenue dropped 8.6 per cent  year-on-year to HK$4.6 billion.

Remaining optimistic
Saying it is uncertain how long the unstable circumstances affecting the growth of gaming revenue will persist, SJM noted in the filing that it ‘remains optimistic about its future prospects.’
The gaming operator explained its optimistic outlook is based upon ‘the potential for growth of visitation and spending’ in the city, as well as ‘infrastructure developments.’
The company added in the filing that its new casino project in Cotai – Grand Lisboa Palace – will be launched during the first half of next year.
The gaming operator did not reveal the exact date of the reopening of Hotel Jai Alai, only saying the property will open in ‘later 2017.’


http://macaubusiness.com/galaxy-sjm-post-mixed-results/

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