SJM Holdings narrows loss in 2023 as earnings top HKD20b

Gaming operator SJM Holdings Ltd. reported a loss in 2023, attributing it to the sectors recovery, after recording a full-year loss of HKD2.01 billion, from nearly HKD7.80 billion compared to the year prior.

Net gaming revenue earned was HKD20.06 billion in 2023, as compared with HKD6.01 billion for the year 2022.

In a statement, the group said that its adjusted earnings before interest taxation, depreciation and amortisation (EBITDA) for 2023 were nearly HKD1.73 billion – a figure that is significantly less than the negative adjusted EBITDA of approximately HKD3.10 billion in 2022.

The gaming operator acknowledged SJM had an 11.9% share of Macau’s gross gaming revenue, including 14.8% of mass market table gross gaming revenue and 3.5% of VIP gross gaming revenue.

Daisy Ho, chairman of SJM Holdings Limited and managing director of SJM Resorts, S.A., said, “SJM Holdings’ results for 2023 show substantial recovery in gaming and non-gaming revenues from the pandemic years.”

“In addition, our operations in the fourth quarter show strong sequential growth in adjusted EBITDA as well as steady progress in the ramp-up of Grand Lisboa Palace,” she added, according to a press release.

SJM’s Cotai property Grand Lisboa Palace recorded an adjusted property EBITDA of negative HKD317 million, as compared with negative HKD969 million for the year 2022.

Grand Lisboa’s EBITDA, meanwhile, was at HKD1.32 billion, as compared with negative HKD758 million from the previous fiscal year.

Earlier this year, Fitch Ratings altered its outlook on SJM Holdings from “negative” to “stable”, expecting the company to turn free cash flow positive in 2024 reflecting the robust recovery in visitation and gaming revenue in Macau, despite the economic downturn in China.

The institution has recalled that SJM has shifted focus away from the VIP segment at these casinos, resulting in VIP revenue at Grand Lisboa recovering to only 9% of 2019 levels and no VIP revenue generated at other
self-promoted casinos.

This has led to a lower GGR contribution, but the EBITDA impact is much more limited as VIP has small margins.