Macau concessionaire SJM reported a 30.8% year-on-year and 8.7% quarter-on-quarter increase in group-wide gross gaming revenues to HK$7.50 billion (US$964 million) in the three months to 30 September 2024, largely driven by high VIP hold. The figure represented 79.0% of 3Q19 GGR levels.
Reporting its third quarter results overnight, SJM revealed GGR of HK$1.42 billion (US$183 million) at Cotai integrated resort Grand Lisboa Palace, up 81.7% year-on-year and enough to see the property’s Macau market share rise 0.9 percentage points to 2.6%. Non-gaming revenue at Grand Lisboa Palace reached HK$354 million (US$45.5 million), while Adjusted Property EBITDA grew by 58.7% quarter-on-quarter to HK$165 million (US$21.2 million) – reversing an Adjusted EBITDA loss of HK$27 million (US$3.5 million) a year earlier.
“This recovery highlights a strong upward trajectory, enhanced revenue streams, and improved operational optimisation across GLP’s various offerings,” the company explained.
At peninsula property Grand Lisboa, GGR grew by 32.5% year-on-year to HK$1.94 billion (US$249 million) with non-gaming revenue of HK$74 million (US$9.5 million). Adjusted Property EBITDA climbed by 46.1% year-on-year to HK$545 million (US$70.0 million).
Other self-promoted casinos Jai Alai Hotel and Sofitel at Ponte 16 delivered non-rolling GGR at 107.2% and Adjusted Property EBITDA at 97.5% of 2019 pre-pandemic levels, SJM added.
Group-wide, Adjusted EBITDA grew 83.2% year-on-year to HK$1.04 billion (US$134 million) on 13.8% margin with market share at 13.9%. Hotel occupancy was 97.7%.
“It gives me pleasure to report the unfolding potential of the Grand Lisboa Palace Resort, with its ramp-up underlining the group’s strong turnaround from challenging times to renewed growth,” said Daisy Ho, Chairman of SJM Holdings Limited and Managing Director of SJM Resorts, S.A.
“In the coming quarters, SJM will launch a series of key visitation drivers to strategically enhance our offer mix, including a diversified pipeline of dining options, increased MICE capacity at Grand Lisboa Palace, and a 10% expansion in hotel capacity at Grand Lisboa. With continued quarter-on-quarter and year-on-year growth in GGR, I am confident that our investments in both people and properties will yield sustained, long-term value.”
In a note, Seaport Research Partners analyst Vitaly Umansky said that the improved Q3 performance – which also resulted in SJM recording a net profit for the first time since COVID of HK$101 million (US$13.0 million) – was mainly due to high VIP hold at both Grand Lisboa and Grand Lisboa Palace.
“Ramp up at Grand Lisboa Palace is a critical driver for the stock to show positive uplift momentum, however the ramp up continues to be slow (albeit stronger than prior quarters), achieving only 2.6% market share,” he said.
“While up 42bps quarter-on-quarter, this was partly helped by high VIP hold of 4.8%. We expect the ramp up at GLP to remain slow and the long-term ROI on the GLP investment is likely to be suboptimal.”
Umansky described the company’s Q3 results as better than expected, but noted that without the high hold, EBITDA would have been below estimates.
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