Moody’s Ratings has downgraded the corporate family rating of Macau casino concessionaire SJM Holdings Ltd to ‘B1’, from ‘Ba3’. The institution changed the firm’s rating outlook to ‘stable’ from ‘negative’.
“The downgrade reflects our anticipation that SJM’s earnings growth will only be gradual over the next 12 to 18 months,” said Stephanie Lau, a Moody’s Ratings vice president and senior credit officer, in a memo issued on Friday.
“Consequently, while we expect its financial leverage to improve from a very high level in 2025, it will likely remain elevated,” she added.
The Macau casino operator reported a first-quarter net loss of circa HKD62 million (US$7.9 million), versus a net profit of HKD31 million a year earlier. That was on net revenues that declined 22.8 percent year-on-year, to HKD5.36 billion.
First-quarter group-wide adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) were down 4.3 percent year-on-year, at HKD917 million.
The three months to March 31 marked the first quarter the company had operated without satellite casinos in its portfolio.
SJM Holdings’ Macau flagship properties are Grand Lisboa on Macau peninsula, and Grand Lisboa Palace (pictured) in the city’s Cotai district.
Moody’s said it expects SJM’s adjusted debt to EBITDA “to improve to around 7.3 times in 2026, from 9.0 times in 2025, and to further improve to approximately 6.3 times in 2027”.
“This improvement is primarily driven by earnings growth, as well as a moderate debt reduction,” the rating agency noted.
The institution stated: “Our adjusted EBITDA forecasts of HKD4.1 billion in 2026 and HKD4.5 billion in 2027, up from HKD3.4 billion in 2025, primarily reflect earnings contribution from Casino L’Arc following its acquisition in December 2025 and gradual earnings accretion from tables reallocated from former satellite casinos.”
It added: “These forecasts also account for continued subdued earnings performance at Grand Lisboa Palace and Grand Lisboa, which is generally in line with its first-quarter 2026 performance.”
Moody’s forecasts SJM’s adjusted debt will stay “largely stable in 2026 and will decline moderately in 2027”.
According to the rating agency, SJM’s liquidity is “good”. The firm’s cash holdings – excluding restricted cash – amounts to HKD2.0 billion, and its available revolving credit facility “will be more than sufficient to cover its committed capital spending and maturing debt over the next 12 to 18 months,” observed Moody’s.
SJM in January issued US$540 million in senior unsecured notes due in 2031. The issuance would “extend the maturity profile of the group’s indebtedness and enhance the group’s financial flexibility”, the company stated at the time.
