S&P optimistic on Genting Group

Analysts noted srong performances in Malaysia and Singapore.

Malaysia.- S&P Global Ratings says Genting Group has recovered from the effects of the Covid-19 pandemic. It affirmed its issuer credit ratings on Genting Bhd, Genting Malaysia, Genting New York, and Resorts World Las Vegas with a stable outlook.

According to analysts, Genting Bhd’s credit quality is likely to continue improving amid robust earnings and limited spending. In 2023, the company’s operations exceeded pre-pandemic levels, with revenue and earnings before interest tax depreciation and amortisation (EBITDA) reaching 125 per cent and 112 per cent of 2019 levels, respectively, due to operational improvements in all its geographies, including Malaysia and Singapore. As for the US, Resorts World Las Vegas, analysts said revenue contribution to the group has been around 15 per cent.

Genting Bhd’s capital expenditure (CAPEX) has remained limited since 2022, and S&P expects positive discretionary cash flows to continue through 2025. This should result in the company’s ratio of funds from operations (FFO) to debt improving to 38 per cent-40 per cent by 2025 from 30 per cent in 2023. However, any additional large investments to expand the geographical footprint could affect Genting Bhd.’s deleveraging, the rating agency said.

S&P believes that winning a full casino licence in New York would solidify the group’s competitive position in the New York gaming market. The group is expected to invest US$5bn if it wins the licence, expected sometime in 2025.