SJM 2Q EBITDA growth due to easy hold comparison, opex efficiency a focus: CBRE

Macau casino operator SJM Holdings Ltd’s second-quarter adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) growth was “due entirely to an easy hold comparison” with the prior-year period, says CBRE Capital Advisors Inc. SJM Holdings recorded adjusted EBITDA of HKD783 million (US$99.9 million) for the three months to June 30, up 13.9 percent year-on-year, according to a Wednesday note from CBRE. “However, the growth was due entirely to an easy hold comparison versus the prior year,” wrote analysts John DeCree and Max Marsh. “Normalising for hold, adjusted EBITDA would have been down 2.1 percent” from a year earlier, they added. The institution said SJM Holdings’ share of the Macau casino gross gaming revenue (GGR) market – in terms of the firm’s self-promoted operations – increased by 2.5 percentage points year-on-year to 10.0 percent in the second quarter, “due in part to the favourable swing in the VIP hold rate”. The casino operator nevertheless gained 0.4 percentage points of GGR market share sequentially, with management citing “some success with targeted customer-experience and product enhancements,” CBRE stated. SJM Holdings’ market share improved in each month of the second quarter, reaching 10.8 percent in June, its “highest monthly total since closing its satellite casino operations in October 2025”. CBRE said boosting operating-expense (opex) efficiency remained a key focus for SJM Holdings, as “elevated labour costs” following the satellite casino closures continued to weigh on margins. “So far, SJM has reduced its staff count by 10 percent over the past seven months and has rolled out several other initiatives to further improve margins by year-end,” the analysts said. They added that as the group’s opex efficiencies and “controlled reinvestment strategy” began to support cash-flow generation, the firm’s management planned to direct the proceeds towards reducing leverage. SJM Holdings had said in its first-half results that it had implemented a group-wide cost-management and opex-efficiency programme aimed at improving productivity and operating leverage. The company reported first-half adjusted EBITDA of HKD1.70 billion, up 3.3 percent year-on-year, despite aggregate net revenue falling 20.8 percent. CBRE said Grand Lisboa Palace, SJM Holdings’ Cotai resort, was “still finding its footing”. GGR at the property increased 14.4 percent year-on-year in the second quarter, “driven entirely by VIP”, with rolling-chip volume up 9.2 percent and VIP hold improving by 1.3 percentage points, according to the institution. SJM Holdings is undertaking a “substantial renovation” of the mass gaming floor at Grand Lisboa Palace, the CBRE analysts noted. They said that while the work would be completed in phases to minimise disruption, it expected some impact through the anticipated completion in the first half of 2027. “While the progress in VIP is encouraging, this business is inherently volatile and highly competitive,” the analysts said. “Grand Lisboa Palace still needs to find more share of the mass market segment to drive higher margins and cash flow.” At Grand Lisboa, adjusted EBITDA rose 2.9 percent year-on-year to HKD434 million, on a 7.5-percent increase in GGR. CBRE described the Grand Lisboa property as SJM Holdings’ “reliable cash flow generator”.