Date
20 September 2017
SJM workers threaten to go on strike during the busy Golden Week holiday, but executive director Angela Leong (inset) hints the company may not be able to grant all their demands. Photo: Bloomberg, Apple Daily
SJM workers threaten to go on strike during the busy Golden Week holiday, but executive director Angela Leong (inset) hints the company may not be able to grant all their demands. Photo: Bloomberg, Apple Daily

SJM struggles to boost revenue as labor row intensifies

Macau casino operator SJM Holdings (00880.HK) is facing escalating pressure to raise the salaries of its workers, driving further negative sentiment for the company as the industry struggles to overcome three straight months of gaming revenue decline.

Workers in SJM led by labor group Forefront of Macau Gaming will stage a protest this Saturday, the fifth industrial action in the past two months.

The labor group said they expect about 1,000 workers to join the mass action, and threatened to go on strike during the October 1 Golden Week holiday if management refuses to respond to their demands, Apple Daily reported on Thursday.

“I am feeling quite sad. Our door is open, but why do some workers [have to threaten to go on strike]?” said SJM executive director Angela Leong On-kei.

She said both management and workers should cooperate to grow the company, instead of seeking to prevail over the other, hinting that management may not be able to meet all of the workers’ demands.

A SJM worker said salary levels at SJM are lower than market rates. He cited other complaints, including the company not recognizing medical certificates issued by government-recognized doctors for sick leaves and hiring temporary workers without setting definite periods for their internship.

Michael Ting, a gaming stock analyst with CIMB Securities, told the newspaper that continuing industrial actions will have a negative impact on SJM’s gaming revenue.

Workers’ salaries only account for 6.3 percent of the company’s income, but if SJM raises the workers’ pay scales, its operating profit ratio and EBITDA ratio will be affected, Ting said.

Macau’s gross gaming revenue dropped 6.1 percent to 28.87 billion patacas (US$3.61 billion) in August from a year earlier, after falling 3.6 percent in July and 3.7 percent fall in June.

Leong said SJM may continue to report a revenue decline this month, before seeing a turnaround in October with the Golden Week holiday.

Nomura Securities agreed, saying that September is traditionally a weak month for the gaming industry with revenue dropping as much as 11 percent to 25.83 billion patacas.

The company’s shares closed 3.4 percent lower at HK$18.12 on Wednesday, and is trading around the same level on Thursday morning.

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JH/JP/CG

EJ Insight reporter

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