SJM Quarterly Profit Rises 22%, Aided by Chinese Visitors

SJM Holdings Ltd. (880), the Macau casino operator founded by billionaire Stanley Ho, reported a 22 percent increase in first-quarter profit as Chinese tourists drove up gambling revenue in the former Portuguese colony.

Net income climbed to HK$1.71 billion ($220 million) from HK$1.41 billion a year earlier, the company said in a Hong Kong stock exchange statement yesterday. Gambling revenue gained 8.5 percent to HK$19.7 billion.

SJM, which owns 20 of the 34 casinos in Macau, faces growing competition from rivals such as Sands China Ltd. (1928) and Galaxy Entertainment Group Ltd. (27) which operate new resorts in the city’s increasingly popular Cotai area. The gambling hub’s casino revenue jumped 42 percent to $34 billion last year, almost six times that of the Las Vegas Strip.

The company’s market share slid to 27.3 percent in the first quarter, from 31.9 percent a year earlier, it said in the statement.

SJM shares fell 3.6 percent to HK$16.86 at the close of Hong Kong trading yesterday, before the earnings announcement. The stock gained 2.3 percent to $2.26 in over-the-counter trading in the U.S., as of 12:11 p.m. New York time.

SJM, whose casinos include the Grand Lisboa and Ponte 16, said earlier this year that it was in advanced talks with the Macau government to build a new casino.

Wynn Macau Ltd., a unit of billionaire Steve Wynn’s Las Vegas company, won a land grant from the Macau government to build its second casino resort, the company said May 2. Galaxy said April 26 that it plans to invest about $2.1 billion to almost double the size of its resort.

Macau is the world’s largest gambling hub and the only place in China where casinos are legal. The number of Chinese tourist to the city soared 22 percent to 16.2 million in 2011.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net

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