GGRAsia – SJM to see rest of GLP rooms, tables launch 2Q: brokerages

SJM to see rest of GLP rooms, tables launch 2Q: brokerages

Mar 10, 2023 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator SJM Holdings Ltd plans to launch the remainder of the hotel-room inventory at its Grand Lisboa Palace (GLP) resort, along with further gaming tables, within the next quarter, stated several Hong Kong-based brokerages citing remarks by the firm’s management, following the full-year 2022 results release on Wednesday.

The total hotel room count at the Cotai casino complex (pictured) is to be close to 1,900. Currently only circa 570 rooms – or around 30 percent – have been opened, the brokerages stated, citing remarks from SJM Holdings’ management. The average hotel occupancy rate at Cotai’s Grand Lisboa Palace and Macau peninsula’s Grand Lisboa was over 100 percent during weekends, and were over 80 percent in the past two months, the casino operator’s management also mentioned, according to analyst commentary.

“In terms of hotel rooms, the west tower of Grand Lisboa Palace with an addition of 188 rooms will be opened this month. The second tower of Grand Lisboa Palace with 658 rooms and Palazzo Versace Macau will open in second quarter 2023,” wrote BofA Securities’ analysts Ronald Leung and Candice Zhang in a Wednesday memo, citing SJM Holdings’ management.

They also noted: “SJM will open 100 more tables in addition to the current 150 tables [at Grand Lisboa Palace].”

The Cotai casino resort has received government approval for an additional 150 gaming tables, and the operator expected to deploy the tables when the rest of the property’s hotel rooms open in the second quarter, suggested China International Capital Corp (CICC) in a Wednesday memo.

“Grand Lisboa Palace’s [daily] operating expense is about HKD5 million (US$636,988) and the firm expects it to reach HKD8 million to HKD9 million when fully ramped up – previously projected at HKD10 million when fully ramped up,” wrote CICC’s analysts Shengyong Goh, Jiayu Wang and Nanxi Liu.

In terms of its capital expenses SJM Holdings expected to incur HKD1.4 billion for 2023, of which HKD900 million would be for Grand Lisboa Palace, several brokerages stated, citing the firm.

As of Wednesday, SJM Holdings’ overall earnings before interest, taxation, depreciation and amortisation (EBITDA) have turned positive, though those of Grand Lisboa Palace have remained negative, according to the brokerages’ memos.

The casino operator’s management projected that Grand Lisboa Palace’s EBITDA could achieve a break-even in the second half of this year after the rest of the property is open, with the casino resort likely to achieve 2 percent to 3 percent of market share of gaming revenue – versus the current circa 1 percent – the brokerages also stated.