SJM Holdings, a casino operator from Macau, has witnessed a substantial enhancement in its operational outcomes, primarily due to cost reductions in its satellite casinos and significant upgrades across its major properties, according to the latest analysis by CBRE Equity Research. The firm disclosed its financial results for the first half of 2024, showing a dramatic narrowing of losses by 87.2%, from HK$1.26 billion ($162 million) in the first half of 2023 to HK$162 million ($20.8 million) in the corresponding period this year.
The company achieved a 0.2% increase in its overall gross gaming revenue (GGR) market share, reaching 12.6%. CBRE analysts credit this improvement to the enhanced cross-selling opportunities and operational synergies provided by the “One SJM” platform.
Sustained growth and enhanced operations:
“Management indicated that market share continued to expand in July, rising to 13.5 percent, with expectations for sustained growth throughout the second half of the year,” the brokerage noted. The satellite casinos under SJM’s management reported a GGR of HK$2.6 billion ($338 million) in the second quarter of 2024, slightly surpassing initial projections. Notably, for the first time since the pandemic began, Property EBITDA turned positive, contributing HK$23 million ($3 million) for the quarter, markedly surpassing previous loss estimates.
SJM operates nine satellite casinos, which include notable establishments such as Casino Casa Real, Casino Landmark, Casino Emperor Palace, and Casino Grandview. The significant reduction in staffing costs, from a daily rate of HK$1.1 million ($143,000) in the first quarter of 2024 to HK$0.6 million ($78,000) in the second quarter, played a crucial role in this financial turnaround.
The Grand Lisboa Palace (GLP) has also demonstrated considerable momentum, with its mass-market GGR increasing by 22% sequentially to HK$750 million ($97 million). This achievement led to an EBITDA margin of 8.6%, resulting in HK$104 million ($13.5 million) of Property EBITDA. “The addition of four new casual dining establishments has contributed to increased foot traffic, while an expanded sales team is actively seeking to attract more premium customers,” the CBRE report stated, as Asia Gaming Brief reports.
Additionally, GLP’s total GGR market share improved by 0.2% to 2.2%, with a further increase of 0.3% in July, bringing it to 2.5%. Plans are underway to open two additional casual restaurants and a food court in the latter half of 2024, which may slightly raise operational expenses but is expected to significantly boost revenue and drive further margin expansion.
Future enhancements at Grand Lisboa:
SJM is also focused on making strategic enhancements at the Grand Lisboa (GL), including the addition of more casual dining options and the transformation of former junket areas into hotel rooms, with an increase in retail space scheduled for 2025. With GL currently operating at full occupancy, expanding more rooms is anticipated to generate additional revenue and further improve profit margins. The recent opening of a new VIP gaming area in the second quarter has already resulted in an uptick in VIP GGR in July.
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