While giving Genting Singapore Limited an A3 rating, Moody’s Ratings has confirmed the issuer ratings for Genting Berhad and Genting Overseas Holdings Limited (GOHL) at Baa2.
Every rating has a steady outlook, which shows that Moody’s has faith in the firms’ ability to operate well in the future.
According to Moody’s Ratings Analyst Yu Sheng Tay, the ratings are based on predictions of steady cash flow generation and stable operating performance.
The group’s varied gaming businesses and solid market positions in strategic areas like Singapore and Malaysia are primarily responsible for this stability. However, Tay pointed out that Genting’s intentions for development, especially in New York, would result in a large rise in debt, which might have a detrimental effect on the ratings.
Analysts point out that Genting Berhad’s geographically diverse gaming activities across Asia, EMEA, and the Americas support its Baa2 grade. The company’s monopoly and duopoly holdings in Malaysia and Singapore accounted for 72% of its sector EBITDA in the first half of 2024.
Additionally, additional earnings diversification is offered by Genting Berhad’s non-gaming businesses, such as the energy and plantation divisions.
Moody’s predicts that Genting Berhad’s EBITDA would increase from MYR10 billion ($2.3 billion) in 2023 to about 4 to 5 percent each year in 2024 and 2025. Its gaming businesses in Singapore and Malaysia are anticipated to be the main drivers of this expansion, with Las Vegas contributing less.
It is anticipated that these problems won’t cause major financial harm or operational difficulties, even though there are still regulatory complaints pertaining to its Resorts World Las Vegas LLC activities and a disagreement over minority shareholders in Resort World Bimini.
Resorts World Sentosa
Genting Singapore
The entire ownership of the integrated resort Resorts World Sentosa (RWS) supports Genting Singapore’s strong position as one of only two licensed casino operators in Singapore, as evidenced by the confirmation of its A3 rating.
Genting Singapore’s predicted EBITDA of around SG$1.2 billion ($91 million) in 2024, a little rise from the year before, indicates that this structure prepares the company to achieve good profitability.
As additional attractions are gradually added, Genting Singapore’s EBITDA is projected to increase to about SG$1.3 billion ($98 million) in 2025, despite short-term operating capacity constraints brought on by hotel renovations. The corporation is spending SG$6.8 billion ($5.1 billion) over a number of years, with the highest investment occurring between 2027 and 2029, to update and extend its capabilities at RWS.
Genting Singapore intends to maintain high liquidity and low debt levels by largely using internal cash sources to finance this capital investment.
Genting Overseas Holdings
The structural subordination risks associated with GOHL’s function as a holding company for Genting Singapore are reflected in the confirmation of its Baa2 ratings. GOHL is susceptible to the financial stability of its parent business, Genting Berhad, as it depends only on dividends from Genting Singapore to pay interest costs. The success of Genting Berhad is therefore inextricably connected to the credit quality of GOHL.
Resorts World Las Vegas
Due to its heavy reliance on Genting Berhad’s resources, GOHL will have difficulty refinancing or redeeming its $1.5 billion notes that are due in 2027. Given the interdependence of their businesses, GOHL’s steady outlook closely resembles Genting Berhad’s.
