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SJM Results Down

26 April 2006

MACAU – As reported by the China Standard: "Former monopoly casino operator Sociedade de Jogos de Macau, currently preparing for an initial public stock offering in Hong Kong, saw its gaming revenue decline by 2.3 percent last year in the face of new competition.

"The downturn came despite the market's overall 11.3 percent growth and SJM opening two new casinos early last year and subsequently expanding several others.

"Analysts had expected SJM to lose market share in 2005, its first full year facing competition, but the absolute revenue decline came as a surprise even though the Macau government previously reported that VIP gaming revenues in the enclave fell 3.1 percent last year.

"…SJM reported gaming revenue of 34.41 billion patacas for 2005, down from 35.21 billion a year before. However, net income rose 36.3 percent to 5.56 billion patacas after the company booked income of 1.61 billion patacas from selling subconcession Macau casino operation rights to a joint venture between MGM Mirage and Pansy Ho Chiu-king, the daughter of SJM controlling shareholder and managing director Stanley Ho Hung-sun. The company recorded 13.9 billion patacas in marketing and promotion expenses.

"Analysts said the results cast a shadow over the IPO, targeted for June, and dash any hopes that SJM could achieve pricing comparable to United States-listed operators such as Las Vegas Sands, now a competitor in Macau. Shares of Las Vegas Sands, listed in New York a year and a half ago, trade at 80 times 2005 earnings based on its prospects for future income growth…"

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