Revenue at Genting Group's respective casino resorts in Malaysia and Singapore for the year is expected to reach "85% to 90%" of pre-pandemic trading periods in 2019, with recovery to pre-crisis levels by the second half of 2024, according to a note from Fitch Ratings.
"Major assets in Malaysia and Singapore, which together contributed more than 60% of Group EBITDA [earnings before interest, taxation, depreciation and amortization] in 2022, have seen visitor numbers rebound since April 2022 after pandemic-led restrictions were lifted," Fitch said in a note on Thursday.
Genting Group's "Malaysian workforce reduction should offset wage inflation and allow EBITDAAR margins to improve from 2019," Fitch said.
Malaysia-based Genting Bhd operates Resorts World Genting, Malaysia's only casino resort, through its subsidiary Genting Malaysia Bhd. The group also operates Resorts World Sentosa properties in Singapore through Genting Singapore Ltd.
"Singapore EBITDAAR margins are unlikely to recover to pre-pandemic levels in the next three years due to higher gaming taxes starting in the second quarter of 2022," Fitch said in a note
Singapore's 2022 increase in gaming gross revenue tax rates on VIP play and public market gambling was shown in April 2019, when the Singapore casino dual monopoly was extended to 2030.
Fitch said it expects parent company Genting Bhd, which it rates as "BBB/Stable," to improve leverage from 4.1 times in 2022 to 3.5 times this year.
This was based on the proportional consolidation of three publicly traded subsidiaries: Genting Malaysia, Genting Singapore, Genting Plants Bhd, which Fitch rates as "BBB/Stable," and Genting Empire Resorts LLC, which operates casino operations in New York State, USA.
Fitch observed that Genting Malaysia subsidiary Genting New York LLC, which the rating company rates as "BBB-/Stable," could bid for a "full-fledged casino license in New York." Currently, Genting New York operates electronic gaming venues in the state.
"We expect the group to rely in part on new debt to finance related capital costs [of potential New York projects] so that there is no real impact on liquidity," the ratings agency said.
"We believe the three-state licensing process, which is likely to be completed by the first half of 2024, will face fierce competition among various operators, and Fitch has not yet taken this into account in Genting Bhd's forecasts due to significant uncertainty," Fitch said, referring to further liberalization of the New York state market
As the group's parent company, Genting Bhd's credit profile was underpinned by the group's status "as the sole casino licensee in Malaysia, which benefits from a high share of domestic visitors and a healthy share in Singapore's dual monopoly market," the financial agency said. 파워볼사이트