Fitch Ratings has raised revenue forecasts for Genting Berhad, anticipating a return to 2019 levels by 2024 and 2025.
Overall, Fitch’s upgraded ratings were said to reflect Genting Berhad’s ‘robust market positioning and diversified revenue streams’, despite regulatory challenges and competitive pressures.
This optimism is driven by a 14 percent year-on-year revenue growth for the group in Malaysia in 1H24, bolstered by increased domestic traffic and a resurgence of international tourism. The completion of infrastructure improvements is expected to further enhance access to Genting Highlands.
In Singapore, Genting Singapore Limited’s revenues are projected to recover to pre-COVID levels, spurred by a rise in international visitors, particularly from greater China, facilitated by visa-free travel arrangements.
Overall, the rating agency reaffirmed the Long-Term Issuer Default Rating (IDR) for Genting Berhad at ‘BBB’. The ratings for its wholly-owned subsidiaries, Genting Berhad Overseas Holdings Limited (GOHL) and Resorts World Las Vegas LLC (RWLV), have also been affirmed at ‘BBB’ and ‘BBB-’, respectively, with all ratings carrying a Stable Outlook.
In addition, Fitch confirmed the rating of GOHL’s $1.5 billion senior unsecured notes, due in 2027, at ‘BBB’. RWLV’s $1.75 billion senior unsecured notes, maturing in 2029, 2030, and 2031, along with its senior secured credit facilities, are rated ‘BBB-’.
‘Genting Berhad’s IDR reflects its unique position as the sole casino license holder in Malaysia, benefiting from a significant domestic visitor base that ensures a steady revenue stream’, the rating agency noted.
‘Furthermore, Genting Berhad holds a strong position in Singapore’s competitive gaming market. The company’s diverse gaming assets in the US and the UK, along with cash flow from non-gaming sectors such as palm oil and energy, enhance its financial stability.’
Fitch expects Genting Berhad’s proportionately consolidated EBITDA net leverage ratio to remain below 3.5x from 2024, supporting its current rating.
Still, Fitch warned that RWLV is currently facing an ongoing complaint from the Nevada Gaming Control Board regarding multiple regulatory violations.
While this situation poses a reputational risk for Genting Berhad, Fitch anticipates an external review and potential overhaul of compliance programs.
The ramp-up of RWLV’s integrated casino in Las Vegas is expected to be delayed, with EBITDA projected to reach $350 million by 2027. Despite competition from established resorts, RWLV’s modern design and diverse entertainment offerings may help it maintain a competitive edge.
Genting Berhad is also evaluating the potential for its step-down subsidiary, Genting New York LLC, to bid for a full-scale casino license in New York, although this was said to have remained uncertain.
Fitch emphasized that even if the New York bid is successful, it is unlikely to materially impact Genting Berhad’s or Genting Malaysia Berhad’s (GENM) credit profiles.
