SJM Holdings Limited Announces Annual Results for Year Ended 31 December 2008 Proposes Dividend
SJM Holdings Limited (HKSE: 880)
today announced its annual results for the year ended 31 December 2008.
Speaking on the annual results, Dr. Stanley Ho, Chairman of SJM Holdings, said, "Our results in 2008 reflected the general economic conditions and specific challenges to our industry that characterized the year, particularly during the second half. However, we have continued to earn a significant profit while making operational improvements across the Group and our Casino Grand Lisboa has gone from strength to strength. With a deliberately careful approach to growth, SJM continues to be one of the most financially sound casino operators in Macau and the leader in terms of market share."
Key points on the annual results of SJM Holdings:
SJM has been able to capitalise on its balance sheet flexibility during the global financial downturn. The Company carries low levels of debt and maintains a strong financial position. Operational improvements across the Group continue and rationalisation strategies are being implemented.
Gaming revenue in 2008 was affected by a decline in VIP gaming revenue, caused principally by reduced VIP chips purchases amid deteriorating economic and financial conditions.
Other factors contributing to lower profit in the year were competitive conditions which resulted in increased commissions being paid to gaming promoters, start-up costs and operating loss of the Company's joint venture Ponte 16 development, start-up costs of the Grand Lisboa Hotel, and increased depreciation and interest costs.
Revenue from mass market table gaming operations continued to grow in 2008, and comprised 40% of the Group's gaming revenue in the year, compared with 33% in 2007.
Casino Grand Lisboa's performance continued to exceed the Company's expectations, with revenue and EBITDA for Casino Grand Lisboa growing by 80% and 41%, to HK,605 million and HK,404 million, respectively.
The Company continued to make progress in improving the efficiency of its operations by modifying service provision agreements with gaming promoters and suspending operations at a number of its smaller casinos.
Other operational highlights of 2008 included the opening of Casino Ponte 16 in February, the opening of the Grand Lisboa Hotel in December, commencement of construction of Casino Oceanus which is scheduled for completion in November 2009 and commencement of construction of Casino L'Arc which is planned for opening in the third quarter of this year.
The Group has maintained a strong financial position, with total shareholders' equity of HK,436 million and bank balances and cash amounting to ,847 million as at 31 December 2008. Total loan facilities available to the Group as at 31 December 2008 were ,600 million, of which 6 million was undrawn. The Company sees no need for borrowing in the coming year.
A final dividend of HK 6.0 cents per share has been proposed.
Subsequent to year-end, the Company announced on 20 March 2009 that it had replaced the terms of its purchase option agreement for the Hotel Lisboa with an agreement for joint redevelopment of the property with Sociedade de Turismo e Diversões de Macau, S.A.
Commenting on the Company's prospects, Dr. Ambrose So, Chief Executive Officer of SJM Holdings, added, "Whilst the growth of Macau's gaming industry has been interrupted by the general weakening of the global economy and the tightening of visa restrictions, we remain confident in SJM Holdings' ability to adapt and grow. We have all the ingredients in place to ensure continued success - the right products, the best strategic locations and a highly successful operation at Casino Grand Lisboa, and will continue to exploit opportunities for growth based on our excellent relationships with gaming promoters while capitalizing on our balance sheet flexibility."
Further information on SJM Holdings Limited including the Company's audited financial statements can be found on www.sjmholdings.com.