News

Macau’s SJM Holdings still has 2,150 excess staff members after the closure of five satellite casinos operating under its license. The closure resulted in a loss of around HK9 million (US.6 million) in redundant payroll as of the June 2023 quarter. The company revealed this information during its 2Q23 earnings call, where it reported an adjusted EBITDA loss of HK3 million from its remaining satellite casinos. These remaining satellites include Casa Real, Landmark, Emperor Palace, Fortuna, Grandview, Kam Pek Paradise, L’Arc, Legend Palace, and Ponte 16.

Macau’s new gaming law led to the closure of Babylon, Diamond, Golden Dragon, Million Dragon, and Royal Dragon in 2022. According to the law, concessionaires must employ former casino dealers unconditionally if satellite casinos operating under their license close. However, the process of rationalizing the excess staff has been slower than expected, with SJM aiming to fully rationalize its workforce by the end of 2025.

Some of the excess staff will be absorbed by the gradual ramp-up of SJM’s Cotai integrated resort, Grand Lisboa Palace. The company expects to complete the training of staff members by the end of this year to bring the resort’s full complement of hotel rooms up to 1,892.

Despite the progress, SJM still faces higher operating expenses compared to pre-COVID levels. The company’s operating expense in Q2 was HK.6 million per day, compared to HK million per day in 2019. This increase is primarily due to the opening of Grand Lisboa Palace and the excess staff.

SJM management anticipates that Grand Lisboa Palace’s market share will increase over time, reaching 3% to 3.5% and possibly up to 6% in the long-term. However, there are issues that need to be addressed, including the government cleaning up the surrounding area, improving connectivity to the Cotai Strip, providing more F&B offerings, and increasing hotel occupancy.

In addition to the Cotai integrated resort, SJM is also planning a substantial renovation of its peninsula property, Grand Lisboa. The renovation will focus on rooms and introduce more casual restaurants for mass and retail areas. The project is expected to start in 2024 and be completed by 2026.

The post Macau’s SJM Holdings Faces Excess Staff Issue Following Closure of Satellite Casinos appeared first on satProviders.