SJM H1 revenue gains 10 percent, though market share slips

SJM Holdings reported an almost 10 percent increase in net revenue for the first half of this year, though its share of the Macau market slipped in all categories from last year.

Revenue came it at HK$17.2 billion ($2.19 billion, while gaming revenue climbed 9.6 percent to HK$16.8 billion. Net profit attributable to shareholders gained almost 57 percent to $1.49 billion, while adjusted EBITDA gained 29.9 percent to $1.95 billion.

The former monopoly holder said its share of overall gaming revenue slipped to 15.1 percent compared with 16.7 percent in the same period a year earlier.

Mass gross table revenue was up by 13.3 percent, while VIP revenue was up 1.4 percent from the same period last year. Slot revenue gained 12 percent.

SJM said it had a 12.2 percent share of VIP GGR, down from 14.2 percent a year earlier, while its share of the mass market was 20.2 percent, down from 21.4 percent. It accounted for approximately 7.9 percent of total slot machine revenue in Macau, compared to 8.5 percent in the corresponding period last year.

Bernstein Research in a note said that the results were in line with market consensus, though above its own estimates, helped in part by a strong performance in July. Although market share was down year on year, it did improve sequentially quarter on quarter.

SJM had 291 VIP gaming tables in operation with 18 VIP promoters, as compared with 279 VIP gaming tables and 19 VIP promoters as at 31 December 2017.

It operated 1,408 mass market gaming tables in its casinos as at 30 June 2018, as compared with 1,424 mass market gaming tables as at 31 December 2017.

The company’s market share has been slipping due to increased competition from new resorts on Cotai. SJM said it is striving to complete its Grand Lisboa Palace IR on the strip by the end of this year and to seek the relevant licenses to begin operation “as soon as possible thereafter.”

“During this period, the group is committed to maintaining its strength in both the mass market and VIP gaming segments while striving to improve its operating efficiency,” it said in a statement to the Hong Kong Stock Exchange. “The group is optimistic regarding its performance for the rest of the year.”

Bernstein said it still believes SJM will continue to underperform the market until 2020 until it opens and ramps up its Cotai property.

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