GGRAsia – SJM aims break-even at Cotai resort in 12mths: Daisy Ho

SJM aims break-even at Cotai resort in 12mths: Daisy Ho

Aug 02, 2021 Newsdesk Latest News, Macau, Top of the deck

The HKD39-billion (US$5-billion) Grand Lisboa Palace, Macau’s newest casino resort, launched on Macau’s Cotai strip on Friday (July 30), might reach break-even in a year “or less”, notwithstanding the challenging business environment due to the Covid-19 pandemic, said senior figures at the promoter, SJM Holdings Ltd, in comments to GGRAsia.

“I think for our property, looking at breaking-even and stabilisation, will take… 12 months or so, or less,” said Daisy Ho Chiu Fung (pictured, foreground), chairman and an executive director of SJM Holdings.

“Of course we will strive” to take a shorter time to achieve that, “but…there are external factors that we cannot control,” added Ms Ho. She was speaking to GGRAsia following Grand Lisboa Palace’s launch on Friday.

Travel rules between Macau and mainland China have been retightened since late July – following a period of easing – due to new Covid-19 infections on the mainland. The latter is the only place to have a largely quarantine-free travel bubble arrangement with Macau.

SJM Holdings’ vice-chairman and chief executive, Ambrose So Shu Fai, (pictured, background) added in the Friday comments to GGRAsia, regarding the outlook for Grand Lisboa Palace: “I think the mere fact that we are open,” means there will be incremental,” interest from consumers,” because previously “we never set foot in Cotai,” for resort operations.

The initial-phase launch included casino space, 300 guest rooms at the firm’s self-branded Grand Lisboa Palace Macau hotel, some restaurants, and space for events.

SJM Holdings’ chairman Ms Ho had mentioned to the local media previously, that her firm aimed for the launch of the remaining phases of Grand Lisboa Palace – including the luxury hotel towers bearing the brands of Karl Lagerfeld and Palazzo Versace – by the end of this year.

SJM Holdings is the last of Macau’s six casino operators in launching a Cotai casino resort complex. The rights of the six licensees are due to expire in June next year, with a fresh public tender anticipated to be linked to that.

Grand Lisboa Palace might generate adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of nearly HKD1.98 billion in 2022, and nearly HKD3.27 billion in 2023, according to a JP Morgan Securities (Asia Pacific) Ltd estimate mentioned in a July 19 note.

“In our view, Grand Lisboa Palace… could fundamentally change how it operates the business,” said the institution. This was due “not only” to SJM Holdings getting access to the Cotai market, but also because “Grand Lisboa Palace’s ample inventory of high-quality rooms should allow it to make a foray into the premium-mass segment,” stated analysts DS Kim, Derek Choi and Livy Lyu.