Genting Group’s credit outlook may be upgraded to stable in the next six to nine months as vaccination rollouts in its key markets reduce the likelihood of operating disruptions, Fitch Ratings says.
The firm said it was maintaining the group’s Issuer Default Rating at BBB, with a “negative” outlook, due to the lack of certainty about the reopening to international travel.
“We do not expect strict lockdowns given high vaccination rates, in line with government policies in Genting’s key markets,” Fitch said. “Therefore, we may revise the Outlook to Stable in the next six to nine months, if Genting builds a longer track record of operational stability, and demonstrates it is able to deleverage in line with our expectations.”
Fitch says Genting is on track to reduce its leverage levels to about 4x in 2022 and 3x in 2023 from 6x this year. It sees consolidated EBITDA at 80 percent of the 2019 level in 2022, with a full recovery in 2023.
The ratings view incorporates Genting Bhd, Genting Malaysia, Genting Singapore, Resorts World Las Vegas and Genting New York.
Fitch said Genting Singapore, which operates Resorts World Sentosa, is currently reporting revenue at about 40 to 50 percent of its 2019 levels, helped by local demand, while Genting Malaysia typically generates 70 percent of its revenue from locals.
Resorts World Genting reopened on a limited basis on Sept. 30th, however the government will not allow interstate travel until 90 percent of the population is fully vaccinated.
The group is also being underpinned by strong operations in the U.S., where gaming revenue is on track for a record year.
“Resorts World New York’s revenue returned to 2019 levels from April 2021,” it said. “RWLV has performed strongly since opening in June 2021, and we think it is on track to achieve fully ramped-up EBITDA of USD350 million by end-2024.”