SJM is a multifaceted company that’s widely known in the gaming and hospitality sectors. On one end, the business runs top casinos such as Casino Lisboa, Casino Oceanus, and Casino Jai Alai, along with three slot halls. And on the other, it focuses on providing top-tier hotel accommodations, catering services, and other hospitality offerings.
Over the years, the company’s revenue earnings have featured both great and unimpressive results.
However, Q3 2024 has proven to be one of its best financial periods yet. In this post, our expert focuses on the group's shocking surge in gaming revenue for the first nine months of 2024.
SJM Holdings’ $53 Million Loss in 2023
Though SJM Holdings is still dealing with the aftermath of past closures, Macau's gaming industry is going through what we may call a recovery phase after a tough pandemic period. In Q3 2023, the company reported a $52.5 million loss. But on the bright side, gaming revenues held steady at $730 million.
According to Inside Asian Gaming, the loss is largely attributed to the parent company as revenues rose about five times (or more) compared to 2022's Q3.
Grand Lisboa Palace in Cotai led the charge, raking in $188 million in gross gaming revenue. And Grand Lisboa on the peninsula chipped in $100 million, almost half of the Cotai property's revenue. The real victory? Grand Lisboa Palace slashed its losses from $29 million in Q3 2022 to just $3.5 million in Q3 2023.
Around the same time, IR Grand Lisboa moved from a $28.6 million loss in the third quarter of 2022 to a $47.8 million profit. And compared to last quarter, they're up 16%.
The group's earnings are also increasing– up 195% to $72.5 million. It's clear SJM's Macau operations are firing on all cylinders. Although the group still shows some scars from 2022, with revenues skyrocketing across all properties, those losses will likely be a distant memory soon.
While commenting on the company's financial result for Q3 2023, Daisy Ho, who happened to be SJM chairman said, “SJM Holdings’ results in the third quarter of 2023 show continued growth in Adjusted EBITDA and steady progress in the ramp-up of Grand Lisboa Palace. In addition, during the quarter, we continued our active support of the economic diversification of Macau through our investment and sponsorship of cultural, educational, gastronomic and sports activities.”
SJM’s Dynamic Surge in Gaming Revenue
SJM Holdings recently shared their financial results for Q3 2024, and it's almost the best thing we've seen so far. Thanks to growth across their properties, their operations are recovering nicely and the company is doing really well.
Revenue-wise, they saw a 27.8% increase compared to the previous year. And that's reaching up to HK$7.5 billion (or about $964 million).
Net gaming revenue (which makes up most of the revenue for the group) went up by 29.2% to a whopping HK$7 billion. Interestingly, most of that growth came from gaming revenue, which includes rolling, non-rolling, and e-gaming.
Also, SJM's profitability increased by 83.2% to HK$1.04 billion in the third quarter. That's because they've been working hard to manage costs and run operations more efficiently.
And if we look at the bigger picture, the company's total net revenue rose by 39.9% year-on-year to about HK$21.3 billion for the first three quarters of 2024. Net gaming revenue was a major part of that, and it soared by 41.0% to a total of HK$19.89 billion.
The group's profit skyrocketed to HK$2.78 billion –an incredible 169.8% increase. And the profit margin expanded from 6.7% to 13.0%.
However, what really drove their success was the properties' stellar performance. Take Grand Lisboa Palace Resort, for instance. Its revenue soared 63.9% to HK$1.78 billion, thanks to strong gains in both gaming and non-gaming areas. And the icing on the cake? The property flipped from a loss to a profit of HK$165 million.
Grand Lisboa absolutely crushed it in the third quarter. Revenue soared 30.3% to HK$2.02 billion, and profit (adjusted property EBITDA) shot up 46.1% to HK$545 million. This just goes to show how well its gaming and non-gaming offerings are holding up.
And it's not just Grand Lisboa. The company's other casinos, Jai Alai Hotel and Sofitel at Ponte 16, are also bringing in the bucks. Revenue increased 16.1% to HK$1.46 billion. Plus, their satellite casinos are making a comeback, with revenue growing 19.7% year-on-year.
On the flip side, the group did take a small hit (about HK$16 million) on investments during the quarter. And with HK$166 million going towards capital expenditures like fixtures, furniture, leasehold improvements, and equipment, they're clearly investing in the future.
What's Next for Grand Lisboa?
Grand Lisboa is getting some exciting upgrades. As a matter of fact, they're adding more casual dining spots and turning old junket areas into hotel rooms. This will bring in more revenue and boost profits, especially since the hotel is already fully booked.
The Macau casino was in the news lately after reports emerged that it was seeking to expand and use ex-junket spaces as villas.
“At Grand Lisboa, the group is set to expand its room capacity by over 10 percent through the conversion of former junket areas into exclusive villas, mansions, and suites, further enhancing guest experiences,” Daisy Ho said in a press release.
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