SJM Q2 EBITDA Growth Was Hold Illusion, CBRE Says

Kyle Kevin

iGaming Writer

Fact Checked

SJM Holdings’ Q2 EBITDA growth was a mirage. Strip out the easy hold comparison and the number falls. The real story is cost cutting.

SJM Holdings’ Q2 2026 adjusted EBITDA rose 13.9% to HKD783 million ($99.9 million). The headline looks healthy. The underlying picture does not. CBRE Capital Advisors says the growth was “due entirely to an easy hold comparison versus the prior year.” Normalise for hold and EBITDA would have dropped 2.1%. The VIP win rate swung favourably. That flattered the numbers. It also masked continued weakness in the mass market, where SJM must compete for sustainable profitability. Market share improved. SJM’s self-promoted operations captured 10.0% of Macau casino GGR in Q2, up 2.5 percentage points year-on-year. The gain was “due in part to the favourable swing in the VIP hold rate,” CBRE noted. Sequentially, share rose 0.4 percentage points. Management cited “some success with targeted customer-experience and product enhancements.” June hit 10.8%, the highest monthly total since satellite casino closures in October 2025. However, the 10% share is still the lowest among Macau’s six concessionaires. SJM is gaining share from a low base. The question is whether it can hold those gains once hold rates normalise.

SJM Holdings Q2 EBITDA: The Hold Illusion

CBRE analysts John DeCree and Max Marsh delivered a blunt assessment. “The growth was due entirely to an easy hold comparison versus the prior year,” they wrote. Hold rate is the percentage of wagers a casino keeps. It fluctuates naturally. In Q2 2025, SJM’s VIP hold was unusually low. In Q2 2026, it reverted toward the mean. That swing added roughly HKD100 million to EBITDA without any operational improvement. Strip it out and the picture changes. “Normalising for hold, adjusted EBITDA would have been down 2.1 percent,” CBRE calculated. The decline reflects real operational challenges. Mass-market table revenue softened. Non-gaming spend was flat. Labour costs remained elevated following the satellite casino closures. SJM’s H1 adjusted EBITDA of HKD1.70 billion was up 3.3% year-on-year. That figure also benefits from the hold swing. The company reported it alongside a 20.8% revenue collapse. The margin expansion is real. The revenue base is not. CBRE’s analysis cuts through the headline. It forces investors to look at what SJM actually controls. The hold rate is not one of those things. Cost management is.

Market Share Climbs to 10.8% in June

SJM improved its market share in each month of Q2. April started low. May rose. June peaked at 10.8%. That is the best monthly performance since the company closed its satellite casino operations in October 2025. The improvement is not trivial. SJM lost roughly one-third of its market share when it exited the satellite model. Rebuilding from 7-8% to 10.8% in eight months required aggressive customer retention. Management pointed to “targeted customer-experience and product enhancements” as drivers. The enhancements include new gaming areas at Grand Lisboa Palace, the Sky Phoenix West Tower VIP zone, and the conversion of Dragon Pavilion to premium mass. On the peninsula, Hotel Lisboa added Crystal Palace gaming space. Grand Lisboa expanded its room inventory by converting former VIP areas. However, CBRE cautioned that the VIP hold rate contributed “in part” to the share gain. When hold normalises, some of that share could evaporate. SJM’s 10.8% in June still trails all five rivals. Sands China, Galaxy Entertainment, MGM China, Wynn Macau and Melco Resorts all hold larger slices. SJM is climbing the ladder from the bottom rung. The sequential 0.4 percentage point gain from Q1 to Q2 is modest. It suggests the recovery is real but slow. The company needs mass-market traction to make share gains stick. VIP is volatile. Mass is where margins live.

Grand Lisboa Palace: VIP Up, Mass Down

Grand Lisboa Palace is SJM’s Cotai flagship. CBRE described it as “still finding its footing.” Q2 GGR rose 14.4% year-on-year. The gain was “driven entirely by VIP.” Rolling-chip volume increased 9.2%. VIP hold improved by 1.3 percentage points. Mass-market tables did not share the joy. CBRE noted that non-rolling gaming volume growth at the property had already slowed to 3% in Q4 2025 and declined 1% in Q1 2026. The mass segment is where SJM needs to compete. Cotai rivals — Sands, Galaxy, Wynn — have newer properties, larger gaming floors and more non-gaming amenities. Grand Lisboa Palace opened in 2021 after pandemic delays. It has struggled to attract the premium mass players who drive profitability. SJM is responding with a “substantial renovation” of the mass gaming floor. The work will proceed in phases to minimise disruption. Completion is expected in H1 2027. CBRE expects “some impact” on operations during the renovation. The timing is awkward. SJM is trying to rebuild mass share while tearing up the floor. However, the renovation is necessary. The current layout was designed for a different market. Post-pandemic Macau demands more open space, more retail integration, more dining options. SJM’s annual report confirmed the upgrade works will continue “in phases throughout 2026, aimed at optimising product mix, improving floor efficiency, and enhancing the overall customer experience.” AGBrief tracks Macau operator earnings and property developments.

Cost Cutting and the 10% Staff Reduction

SJM’s operational challenge is cost, not just revenue. “Elevated labour costs” following satellite casino closures continue to weigh on margins, CBRE noted. The company is attacking that problem directly. SJM has reduced staff count by 10% over the past seven months. It has rolled out “several other initiatives” to improve margins by year-end. The staff reduction is significant. SJM employed roughly 20,000 people before the satellite closures. A 10% cut removes roughly 2,000 positions. Some came from natural attrition. Some came from redeployment. Some came from redundancy. The company has not disclosed the breakdown. CBRE said SJM’s “controlled reinvestment strategy” should support cash-flow generation as opex efficiencies take hold. The proceeds will go toward debt reduction. SJM’s leverage is the elephant in the room. Moody’s and Fitch both downgraded the company in May 2026. Debt-to-EBITDA is projected at 7.8 times for 2026. The company refinanced near-term maturities via a US$540 million senior notes issuance in January. That bought time. It did not fix the balance sheet. Cost cutting is the fix SJM can control. Revenue depends on Macau market recovery and competitive positioning. Costs depend on management discipline. The 10% staff cut is a start. CBRE expects more initiatives through year-end. SJM’s group-wide cost-management programme targets productivity gains and operating leverage. The goal is converting “revenue growth into sustainable earnings.” For now, revenue is not growing. The programme is buying margin by spending less. That is a valid strategy in the short term. It is not a growth strategy. SJM needs both. The Q2 EBITDA number looks better than it is. The hold rate will normalise. The staff cuts will annualise. The renovation will disrupt. The real test comes in 2027, when easy comparisons disappear and SJM must prove it can grow the top line while keeping costs down.

Frequently Asked Questions

This article has been thoroughly researched and reviewed by the CasinoBait editorial team to ensure accuracy and relevance for Asian casino players.