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China – SJM to only open parts of Grand Lisboa Palace in first quarter of 2021

By - 5 November 2020

Macau casino group SJM Holdings will begin a phased opening of its new HK$39bn (US$5bn) Grand Lisboa Palace in Cotai in the first quarter of 2021 with some entertainment facilities to be delayed.

Union Gaming analyst John De Cree said: ““SJM is expecting to open Grand Lisboa Palace in 1Q21, with the scale of the opening in terms of rooms and tables being dictated by market conditions at the time. With this in mind, and the current trajectory of the recovery in Macau, we expect a partial opening. All construction is completed and the final inspection and approval processes are underway. The property already has in-house casino staff and much of the staffing for the casino is done.

“Management will look to staff the hospitality segments closer to their opening. We suspect the opening of a large portion of the hospitality amenities would be delayed until more significant demand returns to Macau.”

SJM held a three day recruitment event in August 2020 at the Grand Ballroom of Grand Lisboa Hotel. Covering thirty departments at the Grand Lisboa Palace, a majority of the job vacancies were non-gaming positions. It received almost 2,000 local applicants, among which about 600 candidates were offered initial selection notices onsite.

The company’s revenue was severely impacted by the COVID-19 outbreak, which led to closure of Macau casinos for 15 days in February, as well as ongoing restrictions on entry from the Mainland, Hong Kong and other locations, curtailment of transportation channels and quarantine requirements.

Net Gaming Revenue of the Group in Q3 2020 was HK$841m, a decrease of 89.6 per cent from Q3 2019, and for the nine months ended September 30 2020, Net Gaming Revenue was HK$5,113m, a decrease of 79.4 per cent from the first nine months of 2019.

Dr. Ambrose So, Vice-Chairman and Chief Executive Officer of SJM Holdings Limited, commented “SJM’s results in the third quarter continued to be impacted by the severe contraction in tourism caused by the COVID-19 pandemic. Around the end of the quarter, however, we saw the beginnings of recovery in visitation, hotel occupancy and visitor spending. We firmly believe that the unique attractions of Macau, combined with the successful responses to this year’s challenges by the Macau SAR and Central Government, will fuel Macau’s resumed development into a global centre of tourism and leisure. SJM of course will be a major participant, and beginning in 2021 our role in diversified tourism development will be further enhanced by our spectacular new resort, the Grand Lisboa Palace.”

Adjusted EBITDA decreased to negative 89 per cent from 11.5 per cent in Q3 2019, and for the nine months ended 30 September 2020 decreased to negative 33.6% from 12.0% in the first nine months of 2019. Loss attributable to theHK$738 million in Q3 2019. Gross gaming revenue of Casino Grand Lisboa in Q3 2020 was HK$176 million, a decrease of 93.7 per cent from Q3 2019, whilst its Adjusted EBITDA was negative HK$336 million, a decrease of 164.1 per cent. For the nine months ended 30 September 2020, Casino Grand Lisboa’s gross gaming revenue was HK$1,502 million, a decrease of 84.4% from the first nine months of 2019, whilst its Adjusted EBITDA was negative
HK$705 million, a decrease of 141.3%.

The Group had HK$5,935m of cash, bank balances and pledged bank deposits and HK$16,783m of debt as at September 30 2020. The Group has a revolving credit facility of HK$10bn, of which HK$8.5bn is undrawn as of 30 September 2020. Construction work on the Grand Lisboa Palace has been completed and the Group is awaiting the assignment by local government authorities of final inspection dates, which

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