A high performance in Adjusted EBITDA helped SJM post HK$738 million in profit, a rise of 4.5%, during the third quarter despite a major drop in VIP gross gaming revenue.
VIP revenue plummeted 42.6% from HK$5.04 billion to HK$2.89 billion with VIP chip revenue falling 44.0% from HK$166 billion to HK$91 billion. And a 12.1% growth in mass market gross gaming revenue, from HK$5.62 billion to HK$6.31 billion, was not enough to plug the hole. Slot machine revenue posted a modest gain of 4.6% to HK$298 million.
Adding the three categories together, gross gaming revenue dropped 13.3% to HK$9.49 billion. It shows a major shift in revenue distribution over the course of the last year. Of the overall revenue in Q3 2018, VIP made up 46% of the total and Mass made up 51% of the total but in Q3 2019 VIP made up just 30% of the total and Mass made up 66.4% of the total.
With the drop in VIP revenue came a major drop in commissions and incentives – this expense category fell 45.2% from HK$2.62 billion to HK$1.43 billion which helped the company post just a minor 3.2% fall in net gaming revenue from HK$8.33 billion to HK$8.06 billion.
Adjusted EBITDA grew 3.4% to HK$950 million, driven by a strong 5.7% gain at Casino Grand Lisboa to HK$524 million.
The group is confident in its financial position with HK$16.02 billion in cash, bank balances, and pledged bank deposits and HK$15.33 billion in debt, as of September 30, 2019.
SJM also noted in the release that construction of Grand Lisboa Palace, its integrated resort on Cotai, is nearing completion and pre-operating government inspections are expected to begin soon.
