SJM PROFIT DIVES 40.8% ON HIGHER COMMISSIONS scmp.com
Stanley Ho’s SJM Holdings saw 1H09 profit drop 40.8% year-over-year despite growing market share. The decrease came after the company paid out higher VIP junket commissions to win business. SJM’s profit dropped to HK$338 million during the first six months from HK$571 million a year ago, but increased by 50.2% when compared to 2H08.
SJM has implemented cost cutting measures that included the shedding of 1,038 employees between December and June. The payroll reduction contributed to a HK$369 million drop in operating expenses in the first half compared to the same period in 2008. However, payments to junkets were not offset by these cuts; marketing a promotion expenses rose to 38.7% of gaming revenue, up from 35.7% a year ago.