- GGR -37.9% YoY in Q3, -39.6% for the first nine months
- Adj EBITDA, -49.5% YoY in Q3 - HK$884M
- Adj EBITDA margin = 7.8% in Q3, down from 9.6% in Q3 2014
- GGR Share 22%
- Grand Lisboa
- GGR = -48.5% YoY, HK$3,450
- Adj EBITDA -49.2% YoY, HK$507M
- Challenging factors still persist, hurting opportunity for profitability
- Market may be stabilizing but they are not forecasting an upturn just yet
- Still remain optimistic on the long term prospects of Macau
- EBIITDA margin squeezed due to labor costs and lower volumes
- Corporate overhead hurt their satelite casinos EBITDA margins, and additionally cash rebates hurt EBITDA margins
- VIP remains unstable, currently have 454 VIP tables vs. 557 at beginning of the year
- VIP Tables at Grand Lisboa - 152 currently vs 177 at beginning of the year
- First Q in SJM's history where Mass revenue exceeded VIP revenue
- Occ up to 85% in the Q, visitation slightly up at most properties.
- Visitation at Grand Lisboa +7% in the Q, trends in October have been promising
- Cost savings associated with labor remains very difficult to attain in Macau
- Lisboa Palace on schedule for 2017 and in line with budget expectations
- CapEX HK$1.8 billion YTD, big CapEx year will be 2016 at roughly HK$17 billion
- Grand Lisboa VIP revenue -58% YoY
- Grand Lisboa Mass QoQ = -8%, YoY -21%
- Cost cutting efforts slowly begin to show some positive signs, but they have just been implemented so it will take time. Expect more cost savings to kick in the future.
- On the revenue side, it is difficult to guide because of the new supply that is coming on line
- Premium mass is growing, targeting a mid tier premium customer and opening a new premium mass pit in early 2016
- Total VIP Hold rate = 3.4% for the Q, normalized roughly 2.9%
- Financing for Lisboa Palace, expect to have more details in the future on bank financing
- Reasons for EBITDA decline despite stable revenues - mostly due to older properties and satelite casinos. Older properties cost of revenue is higher
- Junket color - difficult environment and tough to predict
- Do satelite casinos have chance to survive? Yes, customers are sticky at those properties, they will survive
- MSC - no comments on cannibilization but consider it a nice property
- Not aware of any changes in transit visa policies
- Comp room ratio, roughly 70% of the rooms go to casino players
- No update on Macau Theme Park land
- VIP Hold Rate at Grand Lisboa Q3 2014 2.88%, Q3 2015 3.24%
- Hold rates at all casinos were not the reason for weaker EBITDA margins, cash rebates were likely the driver of that.
- Confident in their abilities to remain competitive despite the new supply that has come online in Macau
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