New Macau Casino Resort to Earn Over $450M by 2023

Fitch Ratings predicts major gambling operator SJM Holdings in 2022 will be able to make a profit of 258 million US dollars from its new integrated resort in Macau. Analysts also estimate that the Grand Lisboa Palace resort will generate about $450 million by 2023.

It is noted that due to a number of restrictive measures, the opening of the first full-fledged SJM casino resort in Kotai was delayed by more than year. However, the HK$39 billion (over US$5 billion) facility will still open its doors in the first quarter of 2021.

Fitch believes that Grand Lisboa Palace will allow SJM to gain a foothold in the Cotai area and increase its market share. The agency's explanatory note states: “We predict that Grand Lisboa Palace will generate revenues of around HK$2 billion by 2022 and HK$3.5 billion by 2023. This yield will partially offset slightly lower earnings at the operator's other sites due to the reallocation of tables and the refocusing of business on Grand Lisboa Palace.”

Projected earnings were calculated against the backdrop of the proposed SJM Holdings bond issue, which will be used primarily to refinance existing debt.

Pricing has yet to be determined, but similar decisions have already been made by Macau's other three largest operators, Wynn Macau Ltd and Studio City, have announced offers of US$750 million, and Melco Resorts $250 million.

SJM said: “If the bonds are issued, the company intends to use approximately 90% of the net proceeds from the proposed placement to refinance syndicated credit facilities, with the remainder for general corporate purposes. . The Board believes that the implementation of the proposed issuance and the use of net proceeds for its intended purpose will bring significant benefits to the brand, as it will expand the group's debt repayment profile and reduce debt.

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