Regional casino and gambling giant, Macau-based SJM Holdings posted a 12 percent year-on-year increase in profits for the first six months of 2019 despite a slip in overall revenues.
The figures released by the gambling operator reveal that their overall revenue slipped slightly by 0.7 percent year-on-year to HK$17.1b (US$2.2b). The company’s net revenue was also down to HK$16.2b for the first six months of 2019, ending June 30.
However, the company’s profits surged as its adjusted earnings rose 6% to HK$2.1b and profit gained 12% to HK$1.68b ($214.7m).
Earlier during the first quarter, SJM had posted similar growth figures as its revenue was up by 0.8 percent and the increase in profits soared to 16.5 percent year-pon-year.
The increase in profits despite declining revenue was attributed mainly to lower special gaming taxes, levies, and premium. Also, the company’s strategy to focus more on the mass-market gaming segment allowed them to cut costs and accentuate profits. The company reportedly saved HK$1.5b in commissions to local Junket Operators.
SJM’s VIP gaming revenue tumbled amidst the ongoing Sino-US trade war. Its VIP revenue slipped by almost 25 percent year-on-year to HK$7.45b while revenue from mass-market gaming jumped by 8% to HK$12.4b.
Earlier this year in May, talking to the press at an SJM event, CEO Ambrose So Shu Fai said that he feared that China-US trade war would further aggravate the revenue crisis facing Macau; however, he said that he believes the city’s gaming revenue prospects are not as bad as it is being projected.