SJM 1Q 2015 CONF CALL NOTES

CONF CALL

  • Revenue run rate equal to 2011
  • Final 2014 div/share of $0.62
  • Permission have been granted to resume construction work two days ago on Casino Jai Alai. New timeline will take around one year.  Total capex: HK$1bn. 130 rooms and 45 gaming tables. 
  • Hard to conclude GGR has bottomed
  • Lisboa Palace: still expect 1H 2017 opening
  • Capex 2015: $HK7.1 bn ($HK5.8 bn due to Lisboa Palace) 
  • Lower occupancy at Grand Lisboa due to junkets giving back some room inventory (5%/21 rooms). Signing more rooms to mass and premium mass. 
  • Galaxy Macau Ph 2: 
  • Dividend payout policy: no less than 50% of net profits.  70% payout is still sustainable.
  • Have not seen an acceleration of Junkets closing 
  • Visa cap: do not see any further tightening of visa. 21m as a cap is talked about. 
  • Smoking ban: still govt discussions being made on smoking lounges
  • Cost control due to tough conditions:  costs held stable QoQ.  Pulled $23m in labor/opex costs out in Q1.  
  • 5% corporate pay raise in Q1. Living subsidies also increased in Q1. 
  • Gaming volumes picked up in recent weeks in April.
  • Premium mass impacted by visa restrictions
  • Slowdown impact (in that order):  Premium mass, grind mass, and slot win
  • Rest of 2015 capex (HK$1.3bn): Grand Lisboa- some slot upgrades and maintenance capex
  • Want to inject more some VIP tables into mass. 
  • % promo expenses/revenues:  flat QoQ
  • Grand Lisboa 1Q VIP win %: 3.26%
  • Have not heard of Mainland govt loosening policies due to poor economic data

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