Macau’s largest casino operator posted an 11% increase in pre-tax earnings in the first quarter on a 10% rise in gambling revenue to HK$21.7 billion (US$2.78 billion).
Hong Kong-listed SJM Holdings recorded EBITDA of HK$2.1 billion at its 20 casinos for the three months ended 31st March. The VIP segment turned in a particularly strong showing, up 13% to $15.1 billion in revenue, and growth was steady in the mass market, with revenues up 4.7% to $6.22 billion.
Estimating growth market-wide at 7% on a same-store basis, SJM is “outpacing the market,” wrote equities analyst Grant Govertsen of Union Gaming Research Macau.
Net income rose to HK$1.92 billion (US$247 million) from HK$1.71 billion in the first quarter of 2012.
Union Gaming noted that VIP got a boost from the reclassification of some 28 high-limit public tables at the company’s flagship Grand Lisboa as “VIP” based on maximum bets that exceeded the regulatory threshold of HK$300,000. The impact of this is not entirely clear, the firm said, in part because the rest of the market does not appear to be following the same reporting protocol. Future reclassifications could result in VIP revenues appearing to grow faster at SJM as more so-called “premium mass” tables are counted as VIP. Conversely, growth could appear to lessen on the mass side.
For the quarter, gaming revenue at Grand Lisboa was up 24% to $8.3 billion, resulting in a 12% increase in property EBITDA to $1.22 billion. The company’s other self-promoted operations, Casino Lisboa and Casino Jai Alai, posted $386 million in EBITDA on a 17% increase in combined gaming revenue to $3.3 billion. Pre-tax earnings at the 17 third-party-promoted “satellite” casinos were up 3% to $420 million on a slight decline in gaming revenue (minus-1%) to $10 billion.
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