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The Fitch Ratings downgraded the Long-Term Foreign-Currency Issuer Default Rating of SJM Holdings Limited from BB- to B+ due to the lower EBITDA growth and underperformance regarding market share in Macau. According to the agency, the downgrade was made on account of the satellite casinos’ closure and poor performance at Grand Lisboa Palace.
Market Share Misses Estimates
SJM recently reported a 1Q26 market share of 9.6% after the closure of its satellite casinos, below Fitch’s earlier assumption of 10.7% for this year. While SJM management is aiming to lift that level by making greater use of returned satellite tables, including through new gaming areas at Grand Lisboa Palace and Casino Lisboa, Fitch said it now expects market share to stay between 9.7% and 9.8% through 2028.
The ratings agency said the downgrade also reflects its revised view that SJM’s leverage path no longer matches the previous rating level. Fitch said it now expects leverage metrics to remain outside the BB- threshold over the next 2 years because EBITDA growth is likely to remain slower than previously anticipated.
EBITDA Outlook Improves Gradually
Despite the downgrade, Fitch said EBITDA should continue to improve gradually as the company moves away from the low-margin satellite model. It also expects SJM to recover some business through self-operated casinos, including the recently acquired L’Arc Casino.
Fitch said it sees further margin improvement from cost reduction through natural attrition and the redeployment of satellite staff. The agency forecast Fitch-adjusted EBITDA of HK$3.7 billion in 2026 and HK$4.2 billion in 2027.
Grand Lisboa Palace Slows
Fitch also highlighted the slower growth at Grand Lisboa Palace as another concern. Mass volume growth at the Cotai integrated resort eased from 17% in 2Q25 to 11% in 3Q25 and then to 3% in 4Q25, before turning into a 1% year-on-year decline in 1Q26.
The agency said it expects GLP’s market share to remain around the current mid-2% level. It cited a competitive environment and limitations in the property’s product offering as factors weighing on its performance.
Rating Pressure Remains
The downgrade leaves SJM under renewed pressure to prove that its Macau business can recover at a faster pace. Fitch’s comments suggest that while the company may see some benefit from lower costs and a more focused operating structure, the pace of improvement is still expected to be modest.
For now, Fitch’s revised outlook puts the emphasis on slower earnings growth, a weaker market share than previously expected, and limited momentum at GLP. Those factors together were enough for the agency to move the company’s rating lower and keep its leverage expectations outside the previous threshold over the next 2 years.
Source: Inside Asian Gaming
