Moody’s upgrades NagaCorp outlook to stable

Moody’s upgrades NagaCorp outlook to stable

The agency has reaffirmed the company’s B3 corporate family rating.

Cambodia.- Moody’s announced on Wednesday (June 5) that it has updated the outlook of NagaCorp from negative to stable while keeping the company’s corporate family rating at B3. The agency also affirmed the B3 senior unsecured rating of the company’s US dollar bond, guaranteed by the major operating subsidiaries of NagaCorp.

Moody’s analyst Yu Sheng Tay said: “The change in outlook to stable reflects our view that refinancing risk has abated as NagaCorp has sufficient funds to repay its U.S. dollar bond in July. Liquidity has improved over the past 12 months, helped by the drawdown of a shareholder loan and reduction in discretionary spending.”

The rating agency anticipated earnings before interest, taxes, depreciation, and amortization (EBITDA) “will rise to US$320m or US$370m in the next 18 months,” from US$295m in 2023, as the tourism industry in Cambodia gradually rebounds. The agency said the B3 rating “reflects the fundamental changes for gaming operators in the area, as the VIP gaming business has declined significantly due to regulatory limitations on junket operations.”

NagaCorp’s EBITDA over the next 18 months was “less than 60 per cent of the amount generated by the company in 2019, indicating a slower recovery compared to its counterparts in the region.”

NagaCorp posted gross gaming revenue (GGR) of US$145m for the first quarter of the year, up 23.7 per cent when compared to Q1 2023. Earnings before interest, tax, depreciation and amortisation (EBITDA) was US$80.3m, up 33 per cent year-on-year. GGR for Mass Market table games increased by 34 per cent. The key growth driver was premium mass high-limit table games, up 51 per cent in year-on-year terms.

It has drawn down US$70m from a US$80m loan agreement it received last October to refinance and discharge a portion of outstanding 2024 notes. The company said it is confident that the notes will be discharged in full upon maturity.

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