Macau concessionaire SJM Holdings reported a 4% decline in gross gaming revenue to HK$11.11 billion (US$1.42 billion) in the three months to 30 June 2019, losing ground in all segments with its lack of presence in Cotai continuing to bite.
The results come as SJM revealed the opening date of its under-construction Grand Lisboa Palace integrated resort had been delayed until at least March 2020 and the cost expanded from HK$36 billion to HK$39 billion (US$5 billion).
It was the VIP segment where SJM suffered most in 2Q19, with rolling chip volume down 31% to HK$118.22 billion and GGR by an identical level to HK$3.52 billion.
Mass GGR increased 8% to HK$6.21 billion with slots GGR falling 1% to HK$285 million, however Sanford C Bernstein analysts estimate the company’s market share for the quarter was 14.1% – down from 15.5% a year ago – including 15.2% market share in VIP (15.8% in 2Q18) and 12.4% in mass (15.3% in 2Q18).
“For the company as a whole, SJM is still suffering from the lack of presence in Cotai and continues to lose market share on a year-on-year basis,” Bernstein said in a note.
Group-wide Adjusted EBITDA for the period increased 3% in 2Q19 to HK$1.0 billion and EBITDA margin by 0.6 percentage points to 11.9%, with Bernstein stating a “better VIP/Mass business mix helped SJM’s margin despite a decline in overall GGR.”
Flagship peninsula property Grand Lisboa saw its momentum slow, with GGR falling 17% to HK$3.34 billion although Adjusted EBITDA grew 12% to HK$572 million.
SJM’s self-promoted casinos – namely Casino Lisboa, Casino Taipa, Jai Alai and Oceanus – booked a 3% increase to HK$1.56 billion while its 16 satellite casinos saw GGR fall 8% to HK$5.12 billion.
Providing a Cotai progress update in its 2Q19 earnings release, SJM said it now aims to complete construction of Grand Lisboa Palace by the end of 2019, with the 8% increase in construction costs incorporating “increased costs related to the project’s revised completion date.”
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