SJM records HKD176m loss for Grand Lisboa Palace

Gambling concessionaire SJM Holdings has recorded a loss of HKD176 million in its Adjusted Property EBITDA for the Grand Lisboa Palace (GLP), the group’s first resort in Cotai.
Since the GLP opened its doors on July 30, it has generated a gross revenue of HKD128 million, which included a gross gambling revenue of HKD69 million and a non-gambling revenue of HKD59 million. The pre-opening expenses were HKD300 million.
As of September 30, the total GLP investment cost was HKD37.8 billion. Meanwhile, a total of HKD860 million in pre-opening costs has been racked up over the nine months ending September 30, 2021.
The resort has not fully opened yet, with at least two hotels under the branded vision of fashion moguls Karl Lagerfeld and Versace still under preparation.
Ambrose So, vice-chairman and CEO of SJM Holdings Limited, commented: “The third quarter of 2021 marked a major milestone in SJM’s history with the opening on July 30 of our Grand Lisboa Palace on Cotai.”
“Our operating results for the quarter and year-to-date registered improvements over 2020, although SJM continued to be impacted by the Covid-19 pandemic that severely interrupted visitor flow to Macau. Nevertheless, with our new products, […] we are confidently poised to participate fully in Macau’s recovery in the coming years,” he added.
Earlier this year, Fitch Ratings forecasted that the GLP will allow SJM to gain a foothold in Cotai and raise its market share.
The analysts predicted that the integrated resort will have EBITDA of HKD2 billion with 330 tables by 2022 and HKD3.5 billion with 380 tables by 2023, “which will be partially offset by slightly lower EBITDA at its existing properties due to table reallocation and business diverted to Grand Lisboa Palace,”
Meanwhile, the group’s other hotel, the Grand Lisboa, has recorded a gross revenue at HKD651 million in the third quarter (Q3), with HKD607 million from gambling. In its first nine months, it has garnered HKD 1.93 million in gross revenue, with HKD1.80 million from gambling. The Adjusted Property EBITDA for the two periods was negative HKD115 million and HKD330 million respectively.
The group had HKD2.8 million in cash, bank balances, short-term bank deposits and pledged bank deposits and HKD20.41 million in debt as of September 30, 2021.
The Adjusted Property EBITDA of the group in Q3 2021 was negative HKD460 million, as compared with negative HKD782 million in Q3 2020. For the nine months ending September 30, 2021, the Adjusted Property EBITDA was negative HKD970 million, as compared with negative HKD1.77 million in the first nine months of 2020. AL