Revenue up but loss widened for SJM in 2Q21

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Macaus SJM Holdings has reported a 12.5% increase in gross gaming revenue, but also a widened loss, for the six months to 30 June 2021 as it continues to feel the impacts of the COVID-19 pandemic.

The 1H21 results saw GGR reach HK$5.51 billion (US$708.5 million), up from HK$4.89 billion (US$628.8 million) a year earlier and led by increases in the mass gaming segment.

According to a Tuesday filing mass table GGR was 33.2% higher year-on-year at HK$4.39 billion (US$564.5 million), with EGM revenue up 12.7% to HK$265 million (US$34.1 million). VIP GGR fell 37.5% year-on-year to HK$855 million (US$109.9 million).

Based on previously reported GGR of HK$2.65 billion (US$341.2 million) for the March 2021 quarter, Q2 revenue grew 7.7% sequentially to HK$2.86 billion (US$367.8 million).

Nevertheless, SJM recorded a loss attributable to owners of the company of HK$1.47 billion (US$189.0 million), including a loss of HK$819 million (US$105.3 million) in 2Q21 versus a loss of HK$647 million (US$83.2 million) in the March quarter.

Adjusted EBITDA for the first half of the year was 48.2% better than the same period in 2020 at HK$510 million (US$65.6 million).

Grand Lisboa, SJMs flagship peninsula property up until last weeks launch of HK$39 billion (US$5 billion) Grand Lisboa Palace in Cotai, reported a 9.7% year-on-year decrease in GGR in 1H21 to HK$1.20 billion (US$154.3 million), although attributable loss improved by 48.3% to a HK$231 million (US$29.7 million).

SJMs other self-promoted casinos, Casino Lisboa, Casino Oceanus at Jai Alai, Casino Eastern and Casino Taipa, reported a 7.3% decline in GGR to HK$800 million (US$102.9 million) while its 14 satellite casinos saw GGR up 29.7% year-on-year to HK$3.51 billion (US$451.3 million).

Commenting on its near-term outlook, SJM said, 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.

As certain travel restrictions are likely to be gradually lifted, given the increasing level of vaccination throughout the region, we are cautiously optimistic that visitation and spending will respond positively. However, we do not expect a return to our pre-pandemic level of revenue during 2021.

Even after travel restrictions are lifted, 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.