Fitch revises SJM outlook to stable

Fitch Ratings said it revised the outlook on SJM Holdings Ltd. to stable from negative, and affirmed the issuer default and senior unsecured ratings at BB-. Fitch also affirmed the BB- rating on the outstanding notes issued by SJMH's subsidiary, Champion Path Holdings Ltd.

“The stable outlook reflects the robust recovery in visitation and gaming revenue in Macao, despite the economic downturn in China. The recovery, together with the continued ramp up of Grand Lisboa Palace (GLP), is likely to improve SJMH's leverage metrics to within the BB- threshold in the coming years,” Fitch said in a statement.

The agency said it forecasts EBITDA of HK$1.7 billion, HK$3.6 billion, HK$5.2 billion and HK$6.6 billion, respectively, in 2023-2026, and EBITDA leverage to decrease to 5.3x in 2025 and 3.7x in 2026. Fitch also projects SJMH's free cash flow to turn positive in 2024 and widen in 2025-2026, cutting its debt balance to HK$26 billion at end-2025 and HK$23 billion at end-2026 from HK$29 billion at end-September 2023.

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