Casino operator SJM Holdings saw narrowed profits in 2016, down 5.6 percent year-on-year to HK$2.3 billion, according to the company’s filing to the Hong Kong Stock Exchange.
Gaming revenue was HK$41.3 billion (US$5.3 billion), down 14.5 percent year-on-year in 2016, while adjusted EBITDA of the group was HK$3.4 billion, down 11.5 percent year-on-year, in line with analyst estimates.
VIP gaming revenue fell 20.5 percent in the year, while mass market table gaming revenue fell 8.2 percent. Slot machine revenue fell 6.4 percent.
Grand Lisboa, its flagship property saw declines in gaming revenue, down 14 percent, while adjusted EBITDA went down 18.2 percent. Profit also fell 15.8 percent in the year.
“Macau’s casino gaming revenue declined in 2016 for the third straight year. The 3.3 percent decline resulted from multiple factors, including changes in administrative policies in Mainland China, and weakness in some sectors of the Chinese economy. The effects of these conditions were felt mainly in upper-end play in each sector of Macau’s gaming market: VIP, mass market and slot machines,” said SJM regarding the market environment.
However, the company is optimistic for the future, with plans to open a new dragon-themed VIP Premium area on the 31st floor of the Grand Lisboa next month. Available to Dragon Club card members, the area will have 7 gaming tables, 12 slot machines, 10 hotel rooms, a club lounge and outdoor terraces for guests.
Looking ahead to 2017, SJM said that while its performance will be susceptible to the “overall economic performance of the surrounding region, government regulatory policies, and the level of visitation to Macau, as well as to the competitive situation among the casino operators in Macau,” it is optimistic of its future prospects “given the potential for growth of visitation and spending in Macau, infrastructure developments that improve access to Macau, the general prosperity of the Asian region, the Group’s strategically located network of casinos and its strong balance sheet,”said the company.
Grand Lisboa Palace, its newest development, is expected to complete around the end of 2017, for opening in the first half of 2018.