prev

SJM 3Q12 CONF CALL NOTES

CONF CALL NOTES

  • EBITDA margin increase was due to the increase in mass market mix of their business
  • In late September, they added most of the gaming tables they have obtained from Satellite casinos to floors 9 & 10 of Grand Lisboa
  • Cotai expansion: 70,468 Meters of land. See completion 3 years after starting construction, hopefully in 2013.

 

Q&A

  • Tables that came out of Greek Mythology and went into Grand Lisboa didn't come online until the end of the quarter.  Their margins at GL decreased because the growth in VIP came from their largest junkets which get the highest commissions.  They also had to train staff from Greek Mythology before they were able to start producing revenue.  So you will see some net margin pressures next quarter as well but not as much as this quarter and there should be net revenue growth.
  • It's not easy to move tables from the their Satellite Casinos.  They are planning to add more tables at GL. There is a plan to renovate Jai Alai and that is one of the easier ways to move tables to their casinos.

 

HIGHLIGHTS FROM THE RELEASE

  • Adjusted Group EBITDA of HK$1,891MM and total revenue of HK$19,052MM
    • Gaming revenue: HK$18,892MM or 26.1% of the market
    • VIP gaming revenue: HK$13,314MM
      • VIP RC: HL$409BN; Hold: 3.05%
    • Mass market revenue: HK$6,040
    • Slot revenue: HK$370MM
    • 601 VIP tables and 1,158 Mass tables
  • Grand Lisbao gaming revenue of HK$7,315MM and Adjusted EBITDA of HK$1,148MM
  • Other self-promoted Casinos revenue of HK$2,591MM and Adjusted EBITDA of HK$271MM
  • Satellite Casinos revenue of HK$8,986MM and Adjusted EBITDA $HK$371
  • Cash: HK$24,880MM and Debt: HK$3,695MM
  • Comparable GAAP EBITDA margin of 17.3%.  "If the Group’s revenue is further adjusted to include the net revenue of self-promoted casinos plus the net revenue contribution (after reimbursed expenses) of the Group’s Satellite Casinos, the Group’s Adjusted EBITDA margin would be 29.4%."
  • Capex: HK$233MM

TAIL Time: S&P 500 Levels, Refreshed

Takeaway: This is the first time where we’re going to legitimately test our 1364 TAIL line of support. If that line snaps, buckle up.

This note was originally published November 14, 2012 at 11:59 in Macro

POSITIONS: Long Utilities (XLU), Short Industrials (XLI)

 

Today is TAIL time. This is the first time where we’re going to legitimately test our 1364 TAIL line of support. If that line snaps, buckle up. Because there’s no real intermediate-term support from there to 1258.

 

Across our core risk management durations, here are the lines that matter to me most:

 

  1. Intermediate-term TREND resistance = 1419
  2. Immediate-term TRADE resistance  = 1391
  3. Immediate-term TRADE support = 1351

 

In other words, my model is already signaling that a breakdown through 1364 is probable. Meanwhile, my immediate-term Risk Range is flagging lower-highs and lower-lows for the first day since May (1351-1391).

 

KM

 

Keith R. McCullough
Chief Executive Officer

 

TAIL Time: S&P 500 Levels, Refreshed - SPX


TAIL Time: SP500 Levels, Refreshed

Takeaway: This is the first time where we’re going to legitimately test our 1364 TAIL line of support. If that line snaps, buckle up.

POSITIONS: Long Utilities (XLU), Short Industrials (XLI)

 

Today is TAIL time. This is the first time where we’re going to legitimately test our 1364 TAIL line of support. If that line snaps, buckle up. Because there’s no real intermediate-term support from there to 1258.

 

Across our core risk management durations, here are the lines that matter to me most:

 

  1. Intermediate-term TREND resistance = 1419
  2. Immediate-term TRADE resistance  = 1391
  3. Immediate-term TRADE support = 1351

 

In other words, my model is already signaling that a breakdown through 1364 is probable. Meanwhile, my immediate-term Risk Range is flagging lower-highs and lower-lows for the first day since May (1).

 

KM

 

Keith R. McCullough
Chief Executive Officer

 

TAIL Time: SP500 Levels, Refreshed - SPX


real-time alerts

real edge in real-time

This indispensable trading tool is based on a risk management signaling process Hedgeye CEO Keith McCullough developed during his years as a hedge fund manager and continues to refine. Nearly every trading day, you’ll receive Keith’s latest signals - buy, sell, short or cover.

Housing: Post-Sandy Surprise

Mortgage activity is bouncing back in the aftermath of Hurricane Sandy. Last week mortgage applications to buy homes rose +11% to an index level of 190. This compares with a decline of 5% in the previous week, reflecting the dislocation caused by Hurricane Sandy. Taken together, however, the two-week change was +5.45%, a fairly strong showing. 

 

Housing: Post-Sandy Surprise - MBA Apps  Shark

 

Refinance applications rose 13% following a decline of 5% in the previous week, snapping a 5-week streak of declines in the refi market. Housing continues to build momentum and prices are rising adequately as sentiment shifts; people prefer to own a home over renting. Thanks to the Federal Reserve, interest rates will remain low for a long period of time, helping to encourage lending.

 

Housing: Post-Sandy Surprise - Shark

 

Of course, the fiscal cliff looms on the horizon and should the automatic tax hikes go into effect along with spending reductions, that will hurt the market and slow the progress we’ve made since the 2008 crisis.

 

Housing: Post-Sandy Surprise - YoY


Playing The Debt Ceiling

The US Treasury is fast approaching its borrowing limit of $16.394 trillion; we expect the Treasury to hit that number within 35 calendar days or by December 17, 2012. While we're growing increasingly optimistic generally about the Financials post the Fiscal Cliff/Debt Ceiling, we think investors should have realistic expectations about what is likely to happen over the immediate/intermediate term. Based on the how things went in the last go-around, we would be positioned defensively in the short-term, and be looking to take advantage of the weakness once resolution if forthcoming.

 

Playing The Debt Ceiling - debtceiling1

 

Playing The Debt Ceiling - debtceiling2

 


Singapore Continues Bleeding

Things just aren’t getting better in Singapore as Q3 shows a decline in gaming metrics and gross gaming revenues hitting their lowest levels since Q2 2010. Q3 hold in Singapore was 2.27%, the lowest quarterly hold rate ever and way below Singapore’s historical hold rate of 2.99%. Hold in 3Q 2011 was 2.90%.

 

Singapore Continues Bleeding - singaporeGGR


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next