Fitch upgrades SJM Holdings outlook to “stable”
Fitch upgrades SJM Holdings to “stable”, citing robust gaming recovery and Grand Lisboa Palace’s impact.
Macau.- Fitch Ratings has recently revised the outlook for SJM Holdings and upgraded its Long-Term Foreign-Currency Issuer Default Rating (IDR) from “negative” to “stable”, with the company’s rating affirmed at ‘BB-‘.
This positive shift is attributed to the resilient recovery observed in both visitation and gaming revenue within the Macau region, despite prevailing economic challenges in China.
Fitch notes that the ongoing recovery, coupled with the continued growth of SJM’s latest venture, the integrated resort Grand Lisboa Palace (GLP), is poised to enhance SJM Holdings’ leverage metrics.
Projections indicate a significant upswing in earnings before interest, taxation, depreciation, and amortization (EBITDA) for SJM, with an anticipated increase from HK$1.7bn in 2023 to HK$3.6bn (US$461.1m) in 2024. The positive momentum is expected to persist, with Fitch forecasting further improvement in 2025 (HK$5.2bn) and 2026 (HK$6.6bn).
According to the projections, SJM’s free cash flow (FCF) is expected to become positive in 2024, and then continue to grow in 2025-2026. This growth will lead to a reduction in the company’s debt balance from HK$29bn as of the end of September 2023, to HK$26bn by the end of 2025, and HK$23bn by the end of 2026.
See also: SJM recognised as Certified Sustainable Development Corporation
