SJM Holdings to raise HK$5bn as H1 revenue drops by 75% from pre-pandemic levels

For SJM Holdings’ half-year results, revenue fell by 20.9% compared to half-year 2021.

This was even lower still – down by 75.8% – if compared to pre-pandemic revenue from the first half of 2019, which was HK$17.07bn.

Revenue from gaming alone was HK$3.81bn, a decrease of 24.9% year-on-year and down 77.2% from 2019. Revenue from mass market table gaming operations made up the majority of this, at HK$3.43bn. VIP gaming operations amounted to HK$386.9m of the total, while slot machine and other gaming operations revenue was HK$248m.

The remaining HK$317.7m came from hotel, catering, retail and leasing related revenues.

Following special gaming taxes, special levies and gaming premiums, coming to a combinedt HK$1.66bn, the total net gaming revenue was HK$2.14bn.

Income related to hotel, catering, retail, leasing and other services came to HK$317.7m, while the share of profits from a joint venture also added HK$2.2m.

Despite the decline in revenue, expenses were up.

The highest expense was HK$4.36bn in operating and administrative costs, which was HK$513.9m more than in half year 2021. Finance costs amounted to HK$398m, an increase of HK$381.4m year-on-year.

The remaining HK$462.1m consisted of marketing and promotional expenses, costs of sales and services relating to hotel operations and other losses.

After expenses, the pre-tax loss was HK$2.75bn. Following tax at HK$10.7m, the total loss for the period was HK$2.77bn, 84.9% higher than the loss in the previous year.

This was HK$4.5bn lower than pre-pandemic levels.

Adjusted EBITDA amounted to a loss of HK$1.17bn, more than double the HK$510m loss in the first half of 2021.

Gross gaming revenue (GGR) at Caisno Grand Lisboa totaled at HK$705m, while at Grand Lisboa Palace it was HK$231m. GGR at other self-promoted casinos – which consist of Casino Lisboa, Casino Oceans at Jai Alai, Casino Eastern and Casino Taipa – was HK$674m.

Satellite casinos, pertaining to 14 third-party promoted casinos, brought in HK$2.46bn in GGR.

The business also mentioned details of a share issue it will conduct, alongside a HK$2bn loan from parent company Sociedade de Turismo e Diversões de Macau.

Sociedade de Turismo e Diversões de Macau will loan SJM HK$2bn over six years, with a 4% interest rate per year.

Up to 1.45 billion shares will be issued as part of the fundraising efforts, priced at HK$2.08 per share. After deducting expenses, SJM Holdings expects to raise between HK$2.93bn and HK$3.01bn.

A total of HK$2.70bn of the proceeds will go towards investment in SJM Resorts. This is due to minimum level of share capital that SJM Resorts must have to qualify for to obtain one of six tenders being issued by the Macau government.