Aug. 11 (Bloomberg) -- SJM Holdings Ltd., Asia’s biggest casino company by sales, said first-half profit climbed 70 percent on a jump in revenue at its VIP tables and at its flagship Casino Grand Lisboa.
Net income rose to HK$2.67 billion ($342 million) from HK$1.57 billion a year earlier, the company said in a filing to Hong Kong’s stock exchange yesterday. Revenue rose 42 percent to HK$37.8 billion. The company said it will pay an interim dividend of 8 Hong Kong cents a share on Sept. 21.
SJM is riding the city’s casino revenue, which surged 58 percent last year to 188.3 billion patacas ($23.4 billion), about four times that of the Las Vegas Strip. Sales of Macau’s casino operators, which are benefiting from growing visitor arrivals from mainland China, will increase 35.3 percent this year and 24.7 percent in 2012, CLSA Asia-Pacific Markets estimated in a July 22 report.
“Even though SJM’s market share may keep falling, they can still sustain their growth because they depend on junkets for growth, not new casino openings,” Kenny Tang, Hong Kong-based general manager of AMTD Financial Planning Ltd., said before the earnings announcement. SJM has a long history in Macau and doesn’t need to depend on “novelty” to win customers, he said.
SJM said its share of Macau casino revenue declined to 31.1 percent in the first half from 31.8 percent in the year-earlier period.
SJM’s VIP gambling revenue jumped 51 percent first half from the year-earlier period to HK$26.6 billion as it added tables. Revenue at Casino Grand Lisboa increased 64 percent and profit gained 56 percent, according to the statement.
SJM rival Galaxy Entertainment Group Ltd.’s market share rose to about 17 percent after the May 15 opening of the Galaxy Macau, the only new addition to the city’s casinos this year, Chairman Lui Che-woo said in June.
Sands China Ltd., owned by billionaire Sheldon Adelson, plans to open the first phase of a project early next year on the Cotai Strip, where it also built the Venetian Macao.
SJM said it will face “new competition” this year and next with new casinos opening on the Cotai Strip while it waits for two government land parcels. The two new projects will probably increase the number of gaming tables to the 5,500 limit set by the government, the company said.
SJM, at the heart of a ownership dispute earlier this year between billionaire founder Stanley Ho and his family members, has gained 47 percent in Hong Kong this year, compared with the 14 percent slide in the benchmark Hang Seng Index. The stock rose 1.5 percent to HK$18.16 yesterday, before the earnings announcement.
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