Moody’s downgrades Melco outlook
Analysts at Moody’s Investors Service have assigned Melco Resorts a lower rating due to a slow recovery in earnings.
Hong Kong.- The credit ratings agency Moody’s has downgraded Melco Resorts Finance Ltd’s corporate family rating and senior unsecured ratings from ‘Ba2’ to ‘Ba3’. It says Melco Resorts’ adjusted debt, including lease liabilities, will increase from US$6.1bn at the end of 2020 to nearly US$7.6bn over the next 12 to 18 months.
The ratings agency has also forecast that Macau mass-market GGR will reach only 60 per cent of pre-pandemic levels in 2022 and will not fully recover until 2023. Moody’s predicted that VIP gaming revenue would remain below 2019 levels in 2023 due to increasing regulatory scrutiny over the segment and the weakened junket sector.
Analysts said: “The rating downgrade reflects our expectation that Melco group’s debt levels and leverage metrics over the next few years will be substantially higher than pre-pandemic levels, because of the slow recovery in earnings amid lingering travel restrictions and sizeable capital spending.”
Melco Resorts & Entertainment has reported operating revenue of US$446.4m for the third quarter of the year. The figure was down 21 per cent from US$566.4m in the previous quarter but up 110 per cent year-on-year.
The casino operator registered GGR of US$402m, down 28 per cent when compared to the previous quarter. Adjusted property EBITDA reached US$31.9m, compared to a negative US$76.7m last year.
