An eventful year for the operator was compounded after it closed five of its “satellite” casinos – which are third-party promoted casinos – and two self-promoted casinos on 27 December 2022.
The satellite casinos were Casino Babylon, Casino Diamond, Casino Golden Dragon, Casino Million Dragon and Casino Royal Dragon.
Revenue for self-promoted casinos in 2022 fell by 41.9% to HK$3.78bn for the full year.
SJM operated 14 satellite casinos in 2021. The operator noted that from 31 December 2022, it operates nine satellite casinos.
The two closed self-promoted casinos were Casino Eastern and Casino Tapia. Self-promoted casino revenue was reported at HK$1.25bn for the year, down by 15.9%
The 12-month period had been somewhat chaotic elsewhere. In May, it agreed to acquire the Casino Oceanus property from its parent company, Sociedade de Turismo e Diversões de Macau. This was so that SJM could fulfill the requirements needed to apply for a gaming concession in Macau.
SJM applied for one of six concessions in September. The new concession process came about as part of an attempt to reform gambling in Macau.
SJM – alongside MGM Resorts International, Galaxy Entertainment Group, Las Vegas Sands, Melco Resorts and Wynn Resorts – won the six concessions. The Macau government signed contracts with the operators in December.
In August, SJM announced that it would raise HK$5.03bn in the form of a share issue and a loan from its parent company. This came after the operator announced a 75% drop in H1 revenue, compared to pre-pandemic levels.
Full results
Net gaming revenue alone was HK$6.09bn, down by 36.6% year-on-year.
Before operational costs were factored in, SJM suffered a cost of HK$2.68bn in special gaming tax, special levy and gaming premium. This was a HK$1.50bn difference yearly.
The most significant cost of the period was HK$8.47bn, from operating and administrative expenses. This increased by 1.2% yearly, a fairly unremarkable difference.
Impairment loss on property and equipment – with no comparable figure from 2021 – was HK$1.21bn.
Finance costs jumped significantly. The total came to HK$1.12bn for 2021, a rise of 227%.
This was due to rocketing gaming operations costs, which went from HK$321.4m to HK$1.08bn year-on-year. Hotel, catering and retail and leasing operations costs at HK$16.6m, along with corporate-level costs at HK$18.7m, made up the remaining total.
Despite income in the form of other income, gains and losses at HK$36.2m, along with share of profits of joint venture at HK$3.6m, the range of remaining costs brought the loss for the year before tax to HK$7.78bn.
Taxation at HK$61.1m brought the total loss to HK$7.84bn, 86.9% higher than in 2021.
Property operations
Turning back to net gaming revenue, a grand majority of the total came from mass market table operations at HK$5.55bn. Revenue from VIP gaming operations fell sharply, by 64.2% to HK$486.3m.
Revenue from slot machine and other gaming operations was HK$416m.
The total net gaming revenue was reached after factoring in commissions and expenses at HK$362.1m.
SJM’s Casino Grand Lisboa accounted for HK$1.06bn in revenue, a drop of 50.4% year-on-year.
Satellite casino revenue was HK$3.78bn.
An additional HK$1.25bn in revenue was generated by what SJM labels as “self-promoted” casinos.
These casinos consist of Casino Lisboa, Casino Oceanus at Jai-Alai and Jai-Alai Hotel and other non-gaming areas.
Original article: https://igamingbusiness.com/finance/full-year-results/seven-casino-closures-deliver-final-blow-on-sjm-fy22/
