Moody’s Ratings has affirmed the issuer ratings for Genting Berhad and Genting Overseas Holdings Limited (GOHL) at Baa2, while granting Genting Singapore Limited an A3 rating.
All ratings carry a stable outlook, indicating Moody’s confidence in the companies’ future performance.
Yu Sheng Tay, a Moody’s Ratings Analyst, explained that the ratings reflect expectations of stable operating performance and consistent cash flow generation.
This stability is largely attributed to the group’s diversified gaming operations and strong market positions in key regions like Singapore and Malaysia. Tay noted, however, that Genting’s expansion plans, particularly in New York, could lead to a significant increase in debt, potentially impacting the ratings negatively.
Analysts note that Genting Berhad’s Baa2 rating is underpinned by its geographically diversified gaming operations spanning Asia, EMEA, and the Americas. The company holds duopoly and monopoly positions in Singapore and Malaysia, which contributed 72 percent of its segment EBITDA in the first half of 2024.
Furthermore, Genting Berhad’s non-gaming ventures, including energy and plantation segments, provide additional earnings diversification.
Looking ahead, Moody’s anticipates that Genting Berhad’s EBITDA will grow by approximately 4 to 5 percent annually in 2024 and 2025, rising from MYR10 billion ($2.3 billion) in 2023. This growth is expected to be driven by its gaming operations in Singapore and Malaysia, along with a smaller contribution from Las Vegas.
Despite ongoing regulatory complaints related to its Resorts World Las Vegas LLC operations and a minority shareholder dispute in Resort World Bimini, the expectation is that these issues will not lead to significant financial damage or operational disruptions.
Genting Singapore
The affirmation of Genting Singapore’s A3 rating highlights its robust position as one of only two licensed casino operators in Singapore, bolstered by its full ownership of the integrated resort Resorts World Sentosa (RWS).
This structure positions Genting Singapore to generate strong earnings, with projected EBITDA of around SG$1.2 billion ($91 million) in 2024, marking a modest increase from the previous year.
Despite temporary operational capacity reductions due to hotel renovations, Genting Singapore is expected to recover, with EBITDA anticipated to rise to approximately SG$1.3 billion ($98 million) in 2025 as new attractions are phased in. The company is investing SG$6.8 billion ($5.1 billion) in expanding and refreshing its offerings at RWS, with spending spread over several years and peaking between 2027 and 2029.
Genting Singapore plans to fund this capital expenditure primarily through internal cash sources, maintaining strong liquidity and minimal debt levels.
Genting Overseas Holdings
The affirmation of GOHL’s Baa2 ratings reflects its role as a holding company for Genting Singapore, which leads to structural subordination risks. GOHL relies entirely on dividends from Genting Singapore to cover interest expenses, making it vulnerable to the financial health of its parent company, Genting Berhad. Consequently, the credit quality of GOHL is intrinsically linked to Genting Berhad’s performance.
With a significant reliance on Genting Berhad’s resources, GOHL faces the challenge of redeeming or refinancing its $1.5 billion notes due in 2027. The stable outlook for GOHL aligns closely with that of Genting Berhad, reflecting the interconnectedness of their operations.
