Moody’s says Asia operators have enough cash for a year

Nine listed gaming operators in the Asia Pacific region are likely to see a plunge of about 70 percent in EBITDA this year, but all should have sufficient cash to cover basic needs for the next year, Moody’s Investors Service said.

In a report, the ratings agency said that falling international travel, property closures and the continuance of social-distancing measures across most countries will keep prospects for the gaming sector weak, at least until 2021.

Moody’s says it expects the sector to recover modestly in 2021, though the outlook for all nine is negative and there is a high risk to forecasts, especially if the virus is not brought under control and lockdowns continue. 

Although the operators have enough cash to meet operating expenses, it warned that some will not be able to meet dividend payments.. 

The report also noted that before the virus outbreak, most rated gaming companies had either started or committed to significant expansionary projects amounting to a total of around $20 billion over five years. 

It said these are likely to continue once operations normalise, either because of expectations for a future recovery or due to commitments made to regulators. 

“We expect the pace of recovery for companies operating in gaming markets that are more reliant on tourism, such as Cambodia (B2 stable) and Singapore (Aaa stable), to be slower. Operators in Malaysia (A3 stable) and Australia (Aaa stable) could recover sooner because of their significant domestic-customer base,” it said. 

“For Macau (Aa3 stable), recovery will rest mostly on the easing of quarantine requirements between China (A1 stable) and Macao as well as China’s resumption of the individual visa scheme for Chinese citizens visiting the city.”

The report covers Genting Singapore; Genting Bhd; Las Vegas Sands, Melco Resorts & Entertainment; Wynn Resorts; MGM Resorts; Studio City Finance; Nagacorp and Crown Resorts.