Casino firm SJM plays down impact of Beijing money-laundering crackdown

Casino operator SJM downplayed any negative impact from reports that Beijing may crack down on money-laundering activity through UnionPay as the firm announced first-quarter earnings that fell short of market expectations.

Adjusted earnings before interest, taxes, depreciation and amortisation for the first three months were up 3 per cent year on year to HK$2.2 billion, compared with the HK$2.28 billion consensus estimate compiled by Bloomberg.

First-quarter profit fell 1.9 per cent year on year to HK$1.87 billion. "It was entirely VIP luck-related," Union Gaming analyst Grant Govertson said. "Management actually separated the numbers and VIP volume was actually up nicely in the quarter."

He said VIP gaming volume was up 17 per cent year on year in the first quarter, better than overall market growth of 13 per cent.

Govertson said management was "upbeat, especially relative to the headline numbers that were a bit light. It dealt with the UnionPay issue and said there has not been an impact and don't anticipate it being an issue."

The original Macau casino operator, SJM lost its No1 market share position to Sands. Its gaming revenues accounted for 23 per cent of the entire gaming market during the first quarter, compared with Sands' 23.1 per cent and the 26.2 per cent it had last year.