S&P affirms NagaCorp B rating

The rating agency has changed NagaCorp’s outlook from negative to stable.

Hong Kong.- S&P Global Ratings has maintained NagaCorp’s B long-term issuer credit rating and has updated the outlook of the company from negative to stable.

The rating agency said NagaCorp’s risk of refinancing has been reduced following the repayment of its outstanding senior unsecured notes in July 2024 but noted that gaming operations are unlikely to recover to pre-Covid-19 levels due to the elimination of Chinese junket operators, which accounted for about 70 per cent of gross gaming revenue (GGR) in 2019.

S&P estimates that NagaCorp’s reported revenue and EBITDA in 2025 will be 38 to 42 per cent and 53 to 57 per cent of pre-Covid-19 levels, respectively.

According to S&P Global’s estimate, the casino operator now has a cash balance of US$80m following the notes repayment. Analysts believe that NagaCorp’s management will continue to prioritise strengthening its balance sheet and capital structure over business expansion, as evidenced by the delayed completion date for Naga III, now set for September 2029.

NagaCorp posted 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.