Macau casino concessionaire SJM Holdings Ltd reported second-quarter results that were “below expectations” and on “very weak margins”, according to two different brokerages.
The casino firm reported on Thursday group-wide revenue of nearly HKD14.64 billion (US$1.88 billion) for the first six months this year, up 6.1 percent from a year earlier. First-half loss widened to HKD182.2 million, compared with a HKD162.4-million loss in the first half of 2024.
Adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) fell by 5.1 percent from a year ago, to just under HKD1.65 billion in the reporting period. The company said its EBITDA margin declined by 1.4 percentage points year-on-year, to 11.2 percent in the first six months of 2025.
The firm’s flagship operations are Grand Lisboa, a casino hotel on Macau peninsula, and Grand Lisboa Palace (pictured), its large-scale resort in the city’s Cotai district. The company also runs casino operations at Hotel Lisboa, a property owned by its parent, Sociedade de Turismo e Diversões de Macau SA (STDM).
SJM Holdings “reported second-quarter results with EBITDA coming in below expectations, -13 percent versus us and -25 percent versus Bloomberg Asia analyst consensus,” observed Seaport Research Partners senior analyst Vitaly Umansky in a Thursday memo.
The brokerage suggested that the ramp-up at Grand Lisboa Palace “has been anaemic,” with the Cotai property “losing market share – partly due to low VIP hold – achieving only 2.3 percent market share, versus 2.8 percent in first quarter and 2.7 percent in the fourth quarter” of last year.
Mr Umansky added: “We expect the ramp up at Grand Lisboa Palace to remain slow with Grand Lisboa Palace unable to achieve 3 percent share this year.”
In a Friday report, JP Morgan Securities suggested SJM Holdings’ second-quarter performance was “significantly below expectations on very weak margins,” likely “dragged by poor VIP luck and higher-than-expected operational spending”.
According to the institution, SJM Holdings’ second-quarter EBITDA “fell 28 percent quarter-on-quarter, to HKD688 million”.
“There was a significant drag from VIP luck, minus HKD114 million, but even its luck-adjusted EBITDA of HKD802m was still 13-percent below Street consensus,” wrote JP Morgan analysts DS Kim, Selina Li, and Lindsey Qian.
“This is in stark contrast to all of its [Macau] peers, who had their EBITDA growing +6 percent quarter-on-quarter on average in the second quarter,” they stated.
Losing market share
SJM Holdings “was the largest market share donor in the second quarter,” added the brokerage’s team.
According to JP Morgan, the “downside in EBITDA” for the casino group “came primarily from its poor margins (9.6 percent, versus 12.8 percent in first-quarter 2025), dragged by its flagship Grand Lisboa Palace, which turned into EBITDA losses”.
“Grand Lisboa Palace operational spending kept rising – HKD8.6 million a day, +5 percent quarter-on-quarter and +23 percent year-on-year) and even its VIP luck-adjusted EBITDA declined more than 50 percent quarter-on-quarter to only HKD48 million … amidst its share loss,” added the JP Morgan team.
On Thursday, SJM Holdings announced that its unit SJM Resorts Ltd had signed a promissory agreement with STDM to acquire a portion of Hotel Lisboa, for a total consideration of HKD529 million.
Once the deal is completed, “SJM Resorts intends to utilise the property to expand the current operation of Casino Lisboa by an additional 7,504 square metres [80,772 sq. feet], which will include former gaming areas and expansion of new facilities,” stated SJM Holdings.
It added: “Supported by the anticipated reallocation of certain gaming tables and slot machines from satellite casinos scheduled to cease operations by the end of 2025, SJM Resorts expects to commence gaming operations within the property.”
In June, SJM Holdings said it will cease operating seven of its current nine satellite casinos by year-end. Only Ponte 16 and L’Arc Macau are expected to continue operations beyond 2025, with SJM having previously announced plans for them to become part of the group’s portfolio of self-promoted operations.
Seaport’s Mr Umansky said of the deal: “We do not expect SJM to be able to keep all the share from the satellites. In 2026-2027, we forecast SJM share to drop to low 11-percent range, albeit with a higher margin).”
The analyst said the institution expects SJM Holdings’ share to remain at circa 12 percent this year.
“After seeing share improve over the last few quarters, SJM lost share in every property segment, as the company is lacking competitive positioning in the higher growth premium segment,” noted Mr Umansky.
In its Friday memo, JP Morgan said there were “no updates” from the management of SJM Holdings regarding the satellite transactions.
“Management said it is still in negotiations with two satellite casino owners – L’Arc [Macau] and Ponte 16 – for a potential acquisition, with no comment on pricing or timing,” it added.
JP Morgan said it was cutting its 2025 EBITDA estimate for SJM Holdings by 3.7 percent, to about HKD3.64 billion.
“The cut in forward EBITDA isn’t that big … as the downside is partially offset by better-than-expected industry demand momentum, i.e., “a rising tide lifts all boats”, even the worst ones,” added the analysts.
