Genting Singapore to generate US$1bn in operating cash flow to 2024

Moody’s Investors Service says cash flow will easily cover projected capital spending.

Singapore.- Moody’s Investors Service expects Genting Singapore to generate SG$1.4bn (US$1.0bn) in operating cash flow up to December 2024. Moody’s says this coupled with the company’s cash balance, will aptly cover projected capital spending of approximately SG$1.0bn, an estimated dividend payout of around SG$0.6bn and minimal debt repayment.

According to analysts, as of June 30, Genting Singapore had a “strong net cash position” with a “cash balance of around SG$3.4bn, compared with lease liabilities of just SG$3m.” It said Genting Singapore’s A3 issuer rating reflects the company’s 100 per cent ownership of Resorts World at Sentosa, which operates Resorts World Sentosa (RWS), and that Genting Singapore expects to retain full access to the resort’s cash flow.

Genting Singapore is committed to a SG$4.5bn phased expansion of RWS, often referred to as “RWS 2.0.” Moody’s said the firm possesses ample liquidity to fund the expansion without incurring additional debt.

It forecasts that Genting Singapore’s earnings before interest, taxation, depreciation, and amortization (EBITDA) will reach approximately SG$1.1bn in 2023 and 2024. This upswing is attributed to the ongoing recovery in Singapore’s tourism sector. Singapore recorded 9.01 million visitors from January to August, a 204.5 per cent year-on-year increase. It received 1.4 million international visitors in July 2023, representing 79 per cent of the same month in 2019.

Nevertheless, Moody’s cautions that Genting Singapore’s earnings are not expected to return to 2019 levels in the short term due to challenges such as high utility and labour costs and increased casino tax rates since March 2022.

In the first half of the year, Genting Singapore posted a net profit of SG$276.7m (US$205.6m). Gaming revenue rose 57 per year-on-year to SG$746.9m (US$555m) and non-gaming revenue 82 per cent to SG$333.2m (US$248m). Genting Singapore’s consolidated revenue was up 63 per cent to SG$1.08bn (US$803m).