SJM Holdings may not resume dividend payments until 2028 as its high leverage leaves limited room for rapid financial deleveraging, according to CLSA analyst Jeffrey Kiang.
In a report issued Tuesday following SJM’s release of its interim financial results, Kiang said the operator’s net debt-to-adjusted EBITDA ratio stood at 8.1 times in the second quarter of 2026, easing only slightly from 8.3 times in the previous quarter.
The ratio remained well above those of SJM’s Macau peers, excluding Galaxy Entertainment Group, which was in a net cash position, the analyst noted.
SJM is expected to benefit from lower staffing costs following the full closure of its satellite casinos, with the savings beginning to appear by the end of 2026.
However, Kiang said the savings would not be sufficient to deliver rapid deleveraging without stronger growth in the wider Macau gaming market.
‘Without faster growth in Macau’s overall gaming revenue, we see no short cut for SJM’s financial deleveraging,’ he wrote.
CLSA’s base financial forecasts still include a small dividend in 2027, but Kiang warned that the resumption of payments could be delayed until 2028.
The brokerage also expects SJM’s earnings and market share growth to remain constrained during the renovation of the mass gaming floor at Grand Lisboa Palace. The work is scheduled for completion in mid-2027.
CLSA does not expect a ‘meaningful expansion’ of SJM’s gaming revenue share before the renovation is completed, although it said the operator was working to minimize disruption.
SJM held an overall Macau gross gaming revenue market share of 10.2 percent in the second quarter, according to the report.
The operator’s adjusted EBITDA rose 14 percent year-on-year to HK$783 million ($100.4 million) during the quarter, broadly in line with CLSA’s forecast but 2 percent below market consensus.
Its adjusted EBITDA margin improved by 4.2 percentage points to 13.8 percent. However, the loss attributable to shareholders widened 9 percent year-on-year to HK$233 million ($29.9 million).
