SJM HOLDINGS(HK:00880)2020-04-23 10:10Integrated Resort Development - The "Grand Lisboa Palace" integrated resort is set to open in the second half of 2020, featuring approximately 1,900 hotel rooms and suites[6]. - The resort will include three distinct hotel towers, with the five-star Grand Lisboa Hotel offering 1,350 spacious rooms designed with luxurious "Chinese style" elements[6]. - The total floor area of the resort is 521,435 square meters, with over 90% designated for non-gaming purposes, enhancing luxury accommodation and leisure experiences[8]. - The shopping center within the resort will cover over 75,000 square meters, housing more than 100 stores, including a flagship duty-free store and Macau's largest department store[8]. - The "Grand Lisboa Palace" will feature over 30 restaurants, showcasing the company's leadership in the Macau dining industry with multiple Michelin-starred awards[8]. - The resort will be the only one globally designed by international fashion brands Versace and Karl Lagerfeld, enhancing its unique appeal[6]. Financial Performance - Total net revenue for the year ended December 31, 2019, was HK$33,875 million, a decrease of 1.6% from HK$34,410 million in 2018[21]. - Gaming net revenue decreased by 1.5% to HK$33,159 million from HK$33,677 million in the previous year[21]. - Profit attributable to the company's owners increased by 12.5% to HK$3,207 million, up from HK$2,850 million in 2018[21]. - Adjusted EBITDA rose by 13.2% to HK$4,213 million compared to HK$3,724 million in 2018[21]. - Adjusted EBITDA margin improved to 12.4%, up from 10.8% in the previous year, reflecting a 1.6% increase[21]. - The flagship casino, Grand Lisboa, saw table gaming revenue and slot machine revenue increase by 8.1% and 5.4%, respectively[16]. - The total cash and bank balance as of December 31, 2019, was HK$15.5 billion, with total loans amounting to HK$15.3 billion[16]. COVID-19 Impact - The company donated MOP 20 million to support COVID-19 relief efforts in Hubei Province, including the procurement of essential medical supplies[12]. - As of February 20, 2020, 16 out of 20 casinos under the company had reopened following a 15-day closure due to COVID-19, with strict health measures in place[12]. - The company emphasizes its commitment to maintaining a safe and hygienic environment for employees and guests amid the pandemic[12]. - The impact of COVID-19 on the company's business in 2020 is expected to be significant, although the extent is currently uncertain[12]. - The impact of COVID-19 is expected to significantly affect the group's performance in the first half of 2020 and beyond, though the full extent remains uncertain[39]. Corporate Social Responsibility - The group has established scholarships for students at the University of Macau and the Macao Institute for Tourism Studies, providing HKD 10,000 each to ten outstanding students annually[53]. - The group sponsored various cultural activities in Macau, promoting the region as a multicultural exchange hub[54]. - 澳博 has registered 1,259 local suppliers under the "Local SME Procurement Cooperation Plan" since its launch in August 2016, with total procurement amounting to over MOP 900 million in 2019[61]. - In 2019, 澳博 provided responsible gambling training to 1,848 new employees and engaged 14,481 participants in responsible gambling promotional activities[58]. - 澳博 sponsored the 13th "Michelin Star Charity Auction Dinner" in December 2019, raising funds for various charitable organizations in Macau[59]. - Over 665 澳博 employees participated in volunteer activities throughout 2019, supporting various community service initiatives[60]. Leadership and Governance - The company has a strong leadership team with extensive experience in public service and community involvement, enhancing its corporate governance[75][76][78]. - The leadership team includes members who have received multiple awards and honors, indicating their recognition in the industry and community[77][78]. - The company has a diversified board with members holding significant positions in other organizations, enhancing its strategic partnerships[75][76][78]. - The executive team is focused on strategic management and overall business operations, ensuring effective governance and decision-making[78]. - The company emphasizes the importance of education and professional development among its leadership, with members holding advanced degrees and professional qualifications[78]. Shareholder and Dividend Information - The proposed final dividend per share is HK$0.22, an increase from HK$0.21 in the previous year, totaling HK$0.30 for the year including the interim dividend[16]. - The company reported a mid-term dividend of HKD 0.08 per share for the six months ended June 30, 2019, consistent with the previous year[91]. - As of December 31, 2019, the company's distributable reserves amounted to HKD 7.329 billion, a decrease from HKD 7.491 billion on December 31, 2018[92]. - The company continues to focus on maintaining shareholder value through consistent dividend payments and strategic investments[91]. Related Party Transactions - The company has ongoing agreements with 澳娛 for property rental and service provision, ensuring fair and reasonable terms compared to independent third parties[119]. - The annual cap for related party transactions with 澳娛 for the fiscal years ending December 31, 2020, 2021, and 2022 is set at HKD 790 million, HKD 120 million, and HKD 29.3 million respectively[125]. - The total amount for property leasing agreements as of December 31, 2019, was HKD 242.7 million, with an annual cap of HKD 307 million for 2020[124]. - The total value of transportation services provided by the group was HKD 99.8 million for the year ending December 31, 2019, with an annual cap of HKD 236 million for 2020[124]. Stock Options and Incentives - The company has a structured stock option plan to incentivize directors and key employees, reflecting a commitment to align interests with shareholders[104][105]. - The total number of stock options granted is 188,270,000, with 175,658,000 remaining unexercised as of December 31, 2019[106]. - The exercise price for stock options is determined by the board and must not be lower than the higher of the closing price on the grant date or the average closing price over the five trading days prior to the grant date[102]. - The total number of stock options granted to directors amounts to 119,500,000, with 4,000,000 options canceled during the year, resulting in a balance of 115,500,000 options as of December 31, 2019[104]. Board Composition and Meetings - The board consists of 12 members, with 7 executive directors (58.3%), 1 non-executive director (8.3%), and 4 independent non-executive directors (33.4%)[156]. - The company adopted a board diversity policy in 2013, considering factors such as gender, age, race, culture, education background, and professional experience for board member nominations[157]. - The board's diversity improved following the appointments of new non-executive and independent non-executive directors on June 11, 2019[157]. - The board of directors held a total of eight meetings in 2019, with individual attendance details provided for each director[171]. Audit and Risk Management - The audit committee consists of 4 members, all of whom are independent non-executive directors, ensuring 100% independence[176]. - The audit committee is responsible for overseeing the financial reporting process and ensuring the effectiveness of internal controls and risk management systems[176]. - The company held a minimum of 2 meetings per year for the audit committee to discuss financial matters[176]. - The Audit Committee held five meetings in 2019, reviewing the company's accounting principles and discussing audit, risk management, and internal control matters[178].