The “deleveraging trajectory” of SJM Holdings, a Macau casino operator, shows a “slower than its partners” pace in the Macau market, suggests Singapore-based Lucror Analytics.

“SJM’s revenue was squeezed by excess staff costs (due to the closure of five satellite casinos in December 2022) and a slow increase in the company’s Grand Lisboa Palace casino resort (pictured),” Luke’s credit analyst Leonard Law wrote in a report published on the Smart Karma platform.

“Our underlying credit bias towards SJM is ‘negative,'” the analyst said.

Last week, Fitch said it revised SJM Holdings’ long-term foreign currency issuer default rating outlook from “negative” to “stable” and confirmed the company’s rating to “BB-“.

The agency said the stable outlook reflected a “solid recovery” in Macau’s visitor arrivals and game revenue volume.

SJM Holdings’ earnings before interest, taxation, depreciation and amortisation (EBITDA) are expected to reach HK$3.6 billion ($461.1 million) this year, up from an estimate of HK$1.7 billion in 2023.

Unlike its peers, SJM Holdings “has not yet begun reducing its net debt as the generation of free cash flows following interest payments and capital investments was neutral during the third quarter and the first nine months of 2023,” according to Lucro

“While there is no maturity of major debt until FY 2026, the company’s liquidity is weaker than its peers,” it added

SJM Holdings’ bonds “have a higher yield” than most of its peers, Lucror noted.

“This reflects that SJM’s business profile and liquidity are weaker than their peers, making the company more vulnerable in the event of another industrial downturn,” Mr Law said.

BY: 온라인경마사이트