SJM Holdings Experiences 241% Year-Over-Year GGR Growth

SJM Holdings, a flagship owner, operator and developer of casinos and IRs in Macau, revealed gross gaming income (GGR) of HK$5.66 billion, approximately US$722 million, for the three months to June 30th, 2023, which grew by 241% year-over-year and was 35% larger compared to the March quarter.

Gaming income still hasn’t reached pre-COVID levels:

While GGR results are great, overall gaming income still hasn’t reached pre-COVID levels, as it is only at 56%. A big reason for that is the “collapse of the junket industry.” As for group-wide VIP GGR, it was only 15% of the second quarter of 2019 levels at HK$512 million, which is roughly US$65 million, while income from mass table games rebounded to 72% at HK$4.35 billion, which is roughly US$555 million, and revenue from electronic table games (ETGs) and slot machines rebounded 97% to HK$421 million (US$54 million).

As for adjusted EBITDA, it was HK$430 million (US$55 million), meaning that the loss from the second quarter of 2022 has been changed changed and compared with an adjusted EBITDA of only HK$31 million (US$4 million) in the first quarter, representing a total of 43% of pre-COVID levels. However, looking at adjusted EBITDA by individual properties, Grand Lisboa revealed adjusted EBITDA of HK$317 million (US$40 million), which grew by 103% quarter-on-quarter, followed by Casino Oceanus and Casino Lisboa at Jai Alai, which enhanced adjusted EBITDA by 26% to HK$329 million (US$42 million). And lastly, Grand Lisboa Palace (GLP), a property in Cotai, decreased its loss of adjusted EBITDA from HK$230 million (US$29 million) in the first quarter to HK$62 million (US$8 million) in the second quarter, even though management said throughout a revenue call with analysts that the said asset started to turn a profit in July.

Furthermore, SJM’s satellite casinos also revealed a loss when it came to adjusted EBITDA of HK$103 million (US$13 million), which was broadly the same as the first quarter’s EBITDA. On a related note, JP Morgan’s DS Kim, said: “The pace of rationalization of excess staff (from five satellite casinos that ceased operation last year) was much slower than expected.” 

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GGR increased during the first 6 months of 2023:

Additionally, during the first 6 months of 2023, GGR increased 125% year-over-year to HK$9.17 billion lodi646 (US$1.17 billion), and adjusted EBITDA of HK$461 million (US$59 million) changed a loss of HK$1.18 billion (US$151 million) from the second quarter of 2022, as mentioned above. And finally, the total loss of income to company’s owners during the same period was reduced from HK$2.76 billion (US$352 million), in 2022 ps, to HK$1.26 billion (US$161 million). In this regard, SJM commented: “We held an 11.8% share of Macau gaming revenue in H1, including 14.9% of mass market table gross gaming revenue and 3.5% of VIP gross gaming revenue.”