SJM Holdings, a prominent gaming operator in Macau, has announced its financial results for the first half of 2022. Despite a decline in revenue compared to previous years, the company remains focused on strategic initiatives for growth. Additionally, SJM Holdings has unveiled plans to raise funds through a share issue and a loan from its parent company, Sociedade de Turismo e Diversões de Macau, to support future investments and meet regulatory requirements.
Decline in Revenue:
SJM Holdings reported revenue of HK$4.12bn for H1 2022, marking a 20.9% decrease compared to the same period in 2021. When compared to pre-pandemic levels in H1 2019 (HK$17.07bn), the decline was even more significant, amounting to a 75.8% drop. The majority of the revenue came from gaming operations, totaling HK$3.81bn, which represented a year-on-year decrease of 24.9% and a significant decline of 77.2% from 2019.
Breakdown of Revenue Sources:
Within the gaming segment, revenue from mass market table gaming operations accounted for the majority at HK$3.43bn. VIP gaming operations contributed HK$386.9m, while slot machines and other gaming operations generated HK$248m. Non-gaming revenue, including hotel, catering, retail, and leasing-related activities, amounted to HK$317.7m. After accounting for taxes, levies, and premiums, the net gaming revenue was HK$2.14bn.
Expenses and Losses:
Despite the decline in revenue, SJM Holdings experienced an increase in expenses. Operating and administrative costs reached HK$4.36bn, an increase of HK$513.9m compared to H1 2021. Finance costs rose to HK$398m, representing a year-on-year increase of HK$381.4m. Other expenses included marketing and promotional expenses, costs of sales and services related to hotel operations, and other losses. Consequently, the company incurred a pre-tax loss of HK$2.75bn. After tax deductions, the total loss for the period amounted to HK$2.77bn, an 84.9% increase from the previous year.
Fundraising Plans and Investments:
To support its future initiatives and meet regulatory requirements, SJM Holdings unveiled plans for fundraising. The company will receive a HK$2bn loan from its parent company, Sociedade de Turismo e Diversões de Macau, over a six-year period, with an annual interest rate of 4%. Additionally, SJM Holdings aims to raise funds through a share issue, with up to 1.45 billion shares priced at HK$2.08 per share. After deducting expenses, the company expects to raise between HK$2.93bn and HK$3.01bn.
Utilization of Funds:
Of the proceeds raised, HK$2.70bn will be invested in SJM Resorts, ensuring compliance with the minimum share capital requirement for one of the six tenders issued by the Macau government. The remaining funds will support the company’s strategic initiatives and future expansion plans.
SJM Holdings’ financial results for H1 2022 reflected a decline in revenue compared to previous years, primarily attributed to the ongoing impact of the pandemic. However, the company remains committed to strategic growth and has announced fundraising plans to support its future investments and meet regulatory requirements. With the planned share issue and loan from its parent company, SJM Holdings aims to strengthen its position in the market and capitalize on potential opportunities in the gaming industry.