{"id":777031647,"date":"2025-09-15T04:21:39","date_gmt":"2025-09-15T07:21:39","guid":{"rendered":"https:\/\/focusgn.com\/asia-pacific\/?p=777031647"},"modified":"2026-04-21T19:12:03","modified_gmt":"2026-04-21T22:12:03","slug":"fitch-downgrades-sjm-holding","status":"publish","type":"post","link":"https:\/\/focusgn.com\/asia-pacific\/fitch-downgrades-sjm-holding","title":{"rendered":"Fitch downgrades SJM Holding"},"content":{"rendered":"\n

The ratings agency has updated the company’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from stable to negative.<\/p>\n\n\n\n\n\n\n\n

Macau.- Credit ratings agency Fitch has revised the outlook for SJM Holdings’ Long-Term Foreign-Currency Issuer Default Rating (IDR) from stable to negative due to uncertainty about how the casino operator will reduce its debt. It’s affirmed a ‘BB-‘ IDR and senior unsecured rating and a ‘BB-‘ rating for the outstanding notes of subsidiary, Champion Path Holdings Limited.<\/p>\n\n\n\n

According to SJM’s latest financial report, the Grand Lisboa Palace (GLP) resort is not increasing its earnings and cash flow as quickly as expected, Fitch says. It said that if operations weaken further, it may lead to a lower rating.<\/p>\n\n\n\n

Fitch expects SJM’s EBITDA leverage to increase to over 8x this year, before gradually falling to below 5x in 2027. Analysts said: “We believe SJMH remains on a deleveraging path in the medium term, with improvement in free cash flow and a focus on debt reduction. However, the deleveraging trajectory has been delayed compared with our previous expectations, and uncertainty remains over the ramp-up of GLP and the impact of its satellite casino closures and restructuring.”<\/p>\n\n\n\n

In August, the casino operator<\/a> posted a loss of HK$182m (US$23.4m) for the first half of the year, compared to HK$162m (US$20.8m) a year earlier. Gross gaming revenue (GGR) was up 7.5 per cent year-on-year at HK$14.8bn (US$1.9bn). EBITDA fell by 5.1 per cent year-on-year to HK$1.65bn (US$212m) while EBITDA margin declined by 1.4 points to 11.2 per cent.<\/p>\n\n\n\n

According to Fitch, SJM posted “weak results” due to unfavourable VIP hold rates affecting profits. Analysts said: “GLP’s revenue growth of 1 per cent in quarter-on-quarter terms and EBITDA margin of 3 per cent in the second quarter of 2025 were both below expectations even on a luck-adjusted basis.” They added that the company “lost market share to competitors’ newly opened hotels and intensified promotional activities.”<\/p>\n\n\n\n

Analysts also said: “GLP also recorded a significant increase in operating expenses during the quarter, mainly due to increased marketing expenses. This, along with stagnant revenue growth, led to margin contraction. The company continues to work on various initiatives to improve GLP’s mass appeal through better connectivity, food and beverage, and retail and event offerings, but its effectiveness in increasing market share remains uncertain.”<\/p>\n\n\n\n

Fitch noted that the company\u00a0will reallocate gaming resources upon the closure of its satellite casinos<\/a> by the end of the year, including around 458 tables and over 4,000 staff, to its self-owned casinos. SJMH is acquiring more gaming space at Casino Lisboa from its parent company, Sociedade de Turismo e Divers\u00f5es de Macau SA (STDM). It also plans to acquire the properties where Casino L’Arc Macau and Casino Ponte 16 are located, allowing these casinos to operate under SJMH with more tables.<\/p>\n\n\n\n

“The impact on SJMH’s credit profile will depend on its ability to recapture the market share of the outgoing satellite casinos, as well as the terms of the acquisitions,” Fitch said. Its base case assumes that SJMH will retain two-thirds of the outgoing satellite casinos’ market share, with tables reallocated to its properties on the peninsula, given their proximity and similar positioning. Such tables should generate higher margins than the previous satellite operations, leading to EBITDA accretion.”<\/p>\n\n\n\n

The analysts said they expect remaining bond maturities can be covered by drawing down on aa HK$3.1bn undrawn revolver. <\/p>\n\n\n

\n\t\t\tSee also:<\/span><\/p>\n
\n\t\t\t\t\"\"<\/p>\n

\n\t\t\t\t\tSee also:<\/span> SJM Holdings reports revenue growth in H1<\/a>\n\t\t\t\t<\/p>\n<\/p>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

The ratings agency has updated the company’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from stable to negative.<\/p>\n","protected":false},"author":176,"featured_media":777031650,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"is_press_release":false,"is_interview":false,"is_opinion":false,"focusai_summary":"Fitch has revised SJM Holdings' Long-Term Foreign-Currency Issuer Default Rating (IDR) outlook from stable to negative, affirming a 'BB-' IDR, citing uncertainty regarding debt reduction and the slower-than-expected ramp-up of the Grand Lisboa Palace (GLP) resort. The ratings agency highlighted increased EBITDA leverage projections and continued market share loss for GLP, despite strategic initiatives to reallocate gaming resources from satellite casinos and acquire additional gaming space.","focusai_entities":"Fitch, SJM Holdings, Champion Path Holdings Limited, Grand Lisboa Palace (GLP), Sociedade de Turismo e Divers\u00f5es de Macau SA (STDM), Casino Lisboa, Casino L'Arc Macau, Casino Ponte 16","focusai_location":"Macau","focusai_target_profile":"ceo_executive (0.95), regulator (0.75), operator_casino (0.9), marketing_crm (0.7), investor_analyst (1.0), supplier_vendor (0.7), journalist_researcher (0.95)","focusai_suggestions":[{"label":"GLP Deleveraging Trajectory?","query":"What specific operational improvements and market conditions are required for SJM Holdings to achieve its projected deleveraging trajectory for GLP by 2027, particularly given the current EBITDA leverage and market share challenges?"},{"label":"Satellite Casino Impact?","query":"How will the reallocation of gaming resources from satellite casinos, including tables and staff, specifically impact SJM Holdings' overall GGR, EBITDA margins, and market share recapture strategy in the Macau peninsula properties?"}],"footnotes":""},"categories":[16338,163],"tags":[29,24619,257,23108],"class_list":["post-777031647","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-east-asia-news","category-finance-news","tag-casino","tag-finance","tag-macau","tag-sjm-holdings"],"_links":{"self":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/777031647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/users\/176"}],"replies":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/comments?post=777031647"}],"version-history":[{"count":5,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/777031647\/revisions"}],"predecessor-version":[{"id":777031659,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/777031647\/revisions\/777031659"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media\/777031650"}],"wp:attachment":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media?parent=777031647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/categories?post=777031647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/tags?post=777031647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}