Genting Berhad’s revenue projections have been boosted by Fitch Ratings, which expects a recovery to 2019 levels by 2024 and 2025.
Fitch improved Genting Berhad’s ratings overall, citing the company’s “robust market positioning and diversified revenue streams” in spite of pressure from competitors and regulations.
This confidence stems from a 14% year-over-year revenue gain for the group in Malaysia in 1H24, supported by both a rebound in foreign tourism and an increase in domestic traffic. It is anticipated that the completion of infrastructural upgrades would boost access to Genting Highlands even further.
With more foreign travelers, especially from greater China, made possible by visa-free travel, Genting Singapore Limited’s earnings are expected to return to pre-COVID levels in Singapore.
In general, Genting Berhad’s Long-Term Issuer Default Rating (IDR) of “BBB” was confirmed by the rating agency. Additionally, the ratings for its wholly-owned subsidiaries, Resorts World Las Vegas LLC (RWLV) and Genting Berhad Overseas Holdings Limited (GOHL), have been confirmed at ‘BBB-‘ and ‘BBB-‘, respectively, with a Stable Outlook assigned to all grades.
Furthermore, Fitch reaffirmed that GOHL’s $1.5 billion senior unsecured notes, which are due in 2027, had a “BBB” rating. RWLV is rated “BBB-” for both its senior secured credit facilities and its $1.75 billion senior unsecured notes, which mature in 2029, 2030, and 2031.
As the only casino license holder in Malaysia, Genting Berhad benefits from a sizable domestic tourist base that guarantees a consistent income stream, as evidenced by its distinctive IDR, according to the rating agency.
Additionally, Genting Berhad is well-positioned in Singapore’s cutthroat gaming industry. The company’s varied gambling holdings in the US and the UK, as well as revenue from non-gaming industries including energy and palm oil, contribute to its improved financial stability.
In order to maintain its current grade, Fitch anticipates that Genting Berhad’s proportionally consolidated EBITDA net leverage ratio would stay below 3.5x starting in 2024.
However, Fitch cautioned that the Nevada Gaming Control Board is still pursuing a complaint against RWLV for a number of regulatory infractions.
Even though Genting Berhad’s image is at jeopardy, Fitch expects an external evaluation and maybe a revamp of compliance systems.
It is anticipated that the expansion of RWLV’s integrated casino in Las Vegas would take longer than anticipated, with an estimated $350 million in EBITDA by 2027. RWLV may be able to sustain a competitive advantage despite competition from more established resorts because to its cutting-edge architecture and wide range of entertainment options.
Although it was previously reported to be unclear, Genting Berhad is also considering the possibility of its step-down company, Genting New York LLC, submitting a proposal for a full-scale casino license in New York.
Even if the New York offer is successful, Genting Berhad’s or Genting Malaysia Berhad’s (GENM) credit profiles are unlikely to be considerably impacted, according to Fitch.
English (UK)