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SJM falls to HK$1 billion loss in 2Q20

Macau concessionaire SJM Holdings reported a loss of HK$1.41 billion for the six months to 30 June 2020, a 184.1% decline versus profit of HK$1.68 billion in the first half of last year due to the severe impact of COVID-19.

With Macau’s borders essentially closed from 27 March to 15 July, and minimal visitor traffic since late January, VIP was hardest hit although all market segments felt substantial pain with GGR down 74.4% to HK$4.37 billion and Adjusted EBITDA by 147.3% to a loss of HK$984 million.

While SJM didn’t provide specific financials for the second quarter, the company’s previously announced 1Q20 results suggest it suffered a loss of HK$1 billion in 2Q20, with GGR down to just HK$434 million and an Adjusted EBITDA loss of HK$784 million.

VIP gaming suffered the biggest segment decline over the first six months of 2020, with chip sales down 84.5% to HK$37.30 billion and GGR down 81.6% to HK$1.37 billion. The group’s GGR from VIP gaming operations amounted to approximately 8.6% of total VIP gaming revenue in Macau, compared to 10.7% in the corresponding period last year.

The company gained some market share in mass due to some locals play in its satellite and other self-promoted casinos, but mass table GGR still fell 73.5% to HK$3.30 billion, while slot machine revenue declined 59.2% to HK$235 million.

By property, flagship Grand Lisboa saw GGR down 80.7% to HK$1.33 billion, with a 1H20 loss of HK$446 and an Adjusted EBITDA loss of HK$369 million. Hotel occupancy was just 18.9% versus 94.8% in the first half of 2019.

SJM’s other self-promoted casinos – Casino Lisboa, Casino Oceanus at Jai Alai, Casino Eastern and Casino Taipa – reported a 71.4% fall in GGR to HK$864 million, with a loss of HK$541 million and Adjusted EBITDA loss of HK$346 million, which included an 84.2% drop in VIP GGR to HK$92 million.

Satellite casinos operating under SJM’s license saw GGR down 74.4% to HK$2.70 billion, with a loss of HK$105 million and Adjusted EBITDA loss of HK$76 million.

SJM also noted that Sofitel at Ponte 16, in which it holds a 51% stake, contributed HK$23 million in revenue to the group compared with HK$102 million in 1H19.

“We expect that gross gaming revenues in Macau, as well as hotel, restaurant and other non-gaming activities that depend on tourism, will continue to be negatively impacted by COVID-19 for an indefinite period in the future,” the company said about its short-term outlook.

“Whilst certain travel restrictions are likely to be gradually lifted, and that visitation and spending will respond positively to such lifting, we do not expect a return to our previous level of revenue during any part of 2020.

“In particular, it is not known when China’s group and individual travel visas, which are critical to Macau’s tourist flow, will be reinstituted on a national basis. Even after such visa resumption, moreover, it is not possible to predict whether there will be lingering economic effects and health concerns caused by COVID-19 that will affect our business for a longer period.”

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