In a remarkable financial turnaround, SJM Holdings Limited, a premier hospitality and gaming company, has disclosed a staggering 229.3% increase in net gaming revenue (NGR) for the fiscal year 2023, reaching $21.20 billion. This surge in revenue was driven by $17.87 billion in non-rolling gross gaming revenue (GGR), $1.55 billion in rolling GGR, and an impressive $1.77 billion from electronic gaming. The NGR represents the GGR after accounting for commissions and incentives amounting to $1.14 billion. These numbers represent the financial performance of SJM Resorts, a fully owned subsidiary of SJM Holdings.
The 2023 fiscal year posed considerable challenges to the company, especially following the closure of seven casinos in December 2022, which included five satellite casinos and two self-promoted establishments. Despite these setbacks, the company’s annual report notes the operation of nine satellite casinos as of December 31, 2023, such as Casino Casa Real, and Casino Emperor Palace, indicating a resilient adaptation to the operational restrictions faced in the previous year.
The fiscal year also marked a significant milestone for SJM Resorts—the first full year under the new gaming concession contract that commenced on January 1, 2023. These concessions were part of a larger industry restructure following a gaming bill passed by the Macau government in 2021. SJM Resorts secured its future in the gaming landscape alongside other industry giants, such as MGM Resorts International and Melco Resorts, each receiving a ten-year concession.
Adding to its financial assets, SJM Holdings included $2.29 billion related to their gaming concession right under ‘non-current assets’. Highlighting the prosperity of SJM’s operations, the Grand Lisboa Palace Resort generated revenues of $3.67 billion, a 434.2% rise, while the iconic Grand Lisboa reported $5.74 billion for the year. Combined revenue streams for the Jai Alai Hotel and Sofitel at Ponte 16 totaled $4.70 billion, with satellite casinos contributing $8.64 billion to the GGR.
The holistic assessment of the company’s financial health, which includes revenue from gaming, hotel operations, catering, retail, and leasing, showed an overall net revenue of $21.62 billion for 2023, translating to a 223.7% increase year over year. Similarly, the company paid a significant $8.48 billion in special gaming taxes and levies, marking a substantial increase from the $2.68 billion remitted in 2022.
In addition to gaming revenue, the company earned $1.56 billion from hotel operations, catering, retail leasing, and related services. Evaluating the expense side of the financial statement, total operating and administrative costs summed up to $8.82 billion, a moderate 4.2% annual uptick. Marketing and promotional expenses stood at $3.82 billion, with finance costs rounding off at $1.93 billion.
While the operating costs were on the rise, SJM’s pre-tax loss for 2023 was significantly lower at $1.83 billion compared to the $7.78 billion loss endured in 2022. Incorporating a $36.1 million tax liability, the net loss for the year settled at $1.87 billion, which was a notable $5.97 billion less than the previous year. When it comes to adjusted EBITDA, the company reported $1.72 billion for the year, signaling a promising stride away from the $3.09 billion loss registered annually before.
With Macau showing early signs of recovery in 2024, SJM’s report highlights that the preliminary visitation data for the region is showing positive trends, nearing pre-pandemic levels of 2019. This early optimism is mirrored in the 163% year-over-year increase in the daily average number of visitors during the Lunar New Year to 169,725.
Furthermore, with the overall 2023 GGR for Macau setting a triggering event, SJM is obliged to augment its non-gaming investments by an additional 20% or MOP2.4 billion, cumulating to MOP14.4 billion over the life of the gaming concession.
Daisy Ho, chair of SJM Holdings Limited and managing director of SJM Resorts, expressed her satisfaction at the financial results, particularly in terms of revenue growth. She appreciated the significant upswing in both gaming and non-gaming revenues compared to the preceding years marked by the pandemic.
In essence, the financial achievements of SJM Resorts in 2023 serve as a testament to the resilience and recovery capabilities of the company. The robust rebound in revenues and the careful management of expenses showcase a successful navigation through the turbulence of 2022, indicating a promising pathway for continued prosperity in the years ahead.
