SJM Holdings 1H loss widens 62pct, adjusted EBITDA up 3pct

Macau casino operator SJM Holdings Ltd reported a loss attributable to its owners of HKD294.7 million (US$37.6 million) for the first half of 2026, widening by 61.7 percent from a year earlier. The company did not declare an interim dividend. The Hong Kong-listed firm said in a Tuesday filing that group adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) nevertheless rose 3.3 percent year-on-year, to HKD1.70 billion. First-half adjusted EBITDA margin improved by 3.5 percentage points from the prior-year period, to 14.7 percent. “This margin improvement was particularly noteworthy against a broader Macau operating environment characterised by cost inflation and elevated reinvestment levels, which continued to exert pressure on industry profitability,” the company stated in press release issued at the time of the results. The margin gain “reflected the continued improvement in the group’s operational efficiency,” added the statement. SJM Holdings’ aggregate net revenue fell 20.8 percent year-on-year, to HKD11.59 billion in the six months to June 30, while net gaming revenue declined 22.5 percent, to HKD10.56 billion. First-half gross gaming revenue (GGR) was just above HKD12.08 billion, down 18.5 percent year-on-year. The firm’s share of the Macau casino GGR market was 9.8 percent, compared with 12.9 percent in the first half of 2025. SJM Holdings said the first half of 2026 was its first full interim reporting period under a direct-management model, following the closure of its satellite casinos by the end of 2025. By contrast, satellite casinos had contributed to the group’s business throughout the first half of 2025, with the first closure only taking place at the end of July that year. The company said the two periods were therefore “not directly comparable” because of the different operating structures. Daisy Ho Chiu Fung, chairman of SJM Holdings, said in prepared remarks that the first half this year marked the completion of a “significant structural transition” as the group assumed direct management of its entire portfolio. “This has strengthened our control over customer experience, cost structure and earnings quality across our properties, with the benefits already reflected in our operating performance and margin expansion,” she added. In the first half this year, rolling GGR rose 32.9 percent year-on-year to HKD1.46 billion, while non-rolling GGR declined 21.8 percent to circa HKD9.62 billion. Electronic-game GGR fell 29.1 percent to slighty above HKD1.00 billion. Peninsula GGR boost SJM Holdings’ collection of “other properties” recorded GGR of HKD4.93 billion, up 85.7 percent year-on-year, supported mainly by the expanded gaming area at Casino Lisboa and contributions from Casino L’Arc Macau. The segment also encompasses Casino Oceanus at Jai Alai, including the gaming area in the Jai Alai building. Adjusted property EBITDA for the segment rose 44.2 percent year-on-year, to HKD939 million, while total revenue reached nearly HKD5.17 billion, up 84.6 percent. Casino L’Arc Macau became a self-promoted casino under the SJM group on December 30. The other eight satellite casinos previously operated by the company ceased operations during 2025. At the Grand Lisboa complex, in downtown Macau, GGR increased 7.1 percent year-on-year to HKD3.84 billion, with total revenue rising 6.6 percent to HKD4.01 billion. Adjusted property EBITDA was broadly flat at HKD860 million, versus HKD863 million in the prior-year period. Grand Lisboa Palace (pictured), the group’s Cotai casino resort, generated GGR of HKD3.32 billion in the first half of 2026, up 12.9 percent from a year ago. Total revenue increased 8.6 percent to HKD3.94 billion. Adjusted property EBITDA however declined to HKD22 million, from HKD82 million a year earlier. SJM Holdings said the decline was due to restructuring-related costs following the satellite-casino closures, increased customer reinvestment aimed at supporting retention, and market-wide cost inflation, which offset the property’s revenue growth. Rolling volume at Grand Lisboa Palace increased 16.9 percent year-on-year to nearly HKD29.60 billion, which the firm attributed to continued improvement in the VIP segment after the “implementation of targeted product and customer-experience enhancements”. The group has also increased table capacity at the Cotai resort following the redeployment of resources from its former satellite casinos. New gaming areas include the Sky Phoenix West Tower VIP area, while Dragon Pavilion has been “reconfigured to support premium-mass business”. On the Macau peninsula, the second phase of the Crystal Palace gaming area at Hotel Lisboa Macau opened on August 10, “further expanding gaming capacity and customer choice,” the company noted. Refurbishment of approximately 400 hotel rooms at Hotel Lisboa – a property owned by SJM Holdings’ controlling shareholder – has also been completed, subject to statutory inspection and approval before the rooms become available to the casino firm. SJM Holdings had nearly HKD3.49 billion in cash, bank balances, short-term deposits and pledged deposits as of June 30, against HKD30.22 billion in debt. The company had HKD2.35 billion available under its revolving credit facility. The company said it had implemented a group-wide cost-management and operational-efficiency programme designed to improve productivity and operating leverage, with a focus on converting revenue growth into “sustainable earnings”. “For the remainder of the year, we remain focused on enhancing the distinct positioning of our properties, further elevating our offerings, and strengthening our appeal across targeted market segments,” Ms Ho said in her remarks. “Through disciplined execution of these initiatives, we aim to deepen customer loyalty, improve portfolio performance, and support sustainable long-term growth,” she added. Both Moody’s Ratings and Fitch Ratings downgraded SJM Holdings’ credit ratings in May, citing concerns about the casino operator’s elevated leverage and pace of earnings recovery.