Macau casino operator SJM posts worse than expected first half profit as high rollers stay away

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SJM’s Macau Peninsula-based casino Stanley Ho assets, has traditionally drawn more high-stakes gamblers, but finds itself in a tight spot as its peers are turning to more profitable tourists and recreational gamblers. Photo: EPA

Published: 7:08pm, 8 Aug 2016Updated: 10:53pm, 8 Aug 2016

SJM Holdings, the Macau gaming operator owned by the family of legendary casino mogul Stanley Ho, posted a worse-than-expected net profit for the first half of the year as high rollers continue to shy away from the once-lucrative global gambling capital.

Adjusted earnings before interest, taxes, depreciation and amortisation, or ebitda, tanked 27.8 per cent to HK$1.63 billion, the company said in an exchange statement, falling short of analyst estimates of HK$1.74 billion.

Total revenue tumbled 20.6 per cent to HK$21.13 billion from a year earlier.

The Macau Peninsula-based casino, which has traditionally drawn more high-stakes gamblers in the former Portuguese colony, has found itself in a tight spot as its peers are turning to more profitable tourists and recreational gamblers with a raft of resorts opening in Macau’s popular Cotai area.

“The group’s performance in the second half of 2016 will remain susceptible to the overall economic

performance of the surrounding region, government regulatory policies... as well as to the competitive situation among the casino operators in Macau,” the company said in a statement.

In an interview with the Post before SJM reported its earnings, UOB Kay Hian analyst Hannah Li said; “SJM is seeing its market share shrinking as Cotai is becoming a top destination for tourists instead of Macau Peninsula, where SJM’s casino and hotel operations are currently located.