SJM Holdings Records Q2 EBITDA Growth Amid Strategic Cost-Cutting in Macau

The gaming landscape in Macau continues to navigate a complex recovery phase in late 2026. SJM Holdings Ltd has announced an adjusted EBITDA of HKD 783 million (approximately US$ 99.9 million) for the quarter ending June 30. While the headline figure of a 13.9 percent increase compared to the previous year suggests strong momentum, industry analysts urge a deeper look at the underlying operational drivers. Much of this growth appears tied to statistical luck rather than pure volume increases.

Analysts John DeCree and Max Marsh from CBRE Capital Advisors Inc highlighted that the EBITDA rise was entirely linked to an easier hold comparison. After adjusting for these fluctuations in win rates, the company’s performance actually showed a 2.1 percent year-on-year decline. This discrepancy underscores the ongoing volatility within the VIP gaming segments and highlights why management is aggressively pursuing operational efficiency programs to stabilize margins independently of luck.

Numbers and facts

SJM's market share in Macau’s total Gross Gaming Revenue (GGR) showed signs of recovery, reaching 10.0 percent for the second quarter, an improvement of 2.5 percentage points year-on-year. June was particularly strong, with market share hitting 10.8 percent, the highest level since the company shuttered its satellite casino operations in October 2025. The classic Grand Lisboa property remains the group's financial backbone, contributing HKD 434 million in EBITDA, up 2.9 percent, supported by a 7.5 percent rise in GGR.

Conversely, the newer Grand Lisboa Palace on the Cotai Strip is still in its developmental phase. While its GGR rose by 14.4 percent, this was driven almost exclusively by VIP activity. Rolling-chip volume saw a 9.2 percent increase, yet the property lacks the stable mass-market base required for consistent cash flow. To address this, a significant renovation of the mass gaming floor is underway, with completion expected in the first half of 2027. Analysts suggest that gaining a larger slice of the mass market is critical for the resort's long-term profitability.

Background

The most pressing challenge for SJM Holdings is its operating expenditure, particularly labor costs. Following the structural changes in late 2025, the group found itself with a surplus of staff. In response, the operator has cut its headcount by 10 percent over the last seven months. These measures are part of a wider productivity program designed to direct future cash flows toward reducing the company's debt leverage.

"The improvement was partly supported by a favourable change in the VIP hold rate. Management’s targeted customer-experience and product enhancements are beginning to show progress." - John DeCree, Analyst at CBRE Capital Advisors Inc

The overall performance for the first half of 2026 presents a mixed picture. While adjusted EBITDA rose 3.3 percent to HKD 1.70 billion, aggregate net revenue fell by 20.8 percent. This indicates that while SJM is becoming more efficient, it is operating within a significantly smaller revenue framework than in previous years, reflecting a more disciplined but leaner business model.

Why it matters for German players

For players in Germany, the fiscal health of global giants like SJM serves as a reminder of the industry's complexity. Unlike the volatile VIP markets in Macau, the German market is strictly governed by the State Treaty on Gambling 2021 (GlüStV 2021). German players benefit from high levels of protection, including a 1 Euro per spin limit on slots and a mandatory 1,000 Euro monthly deposit limit managed via the LUGAS system. While SJM battles with hold rates and large-scale renovations, German consumers should focus on playing at GGL-licensed casinos, which provide a stable and legally secured environment far removed from the high-stakes volatility of Asian VIP rooms.

What it means for GGL-licensed casinos

The cost-cutting measures at SJM mirror a global trend where efficiency is prioritized over raw expansion. GGL-licensed operators in Germany face high taxes and strict technical requirements for player protection. SJM’s situation demonstrates that even the largest operators must adapt their cost structures to survive changing market dynamics. For German-licensed sites, the focus remains on sustainable growth through compliance and technological innovation. Providing a safe environment under the oversight of the GGL is the best way to ensure long-term viability without relying on the high-risk, high-reward cycles typical of international markets like Macau.