S&P: Genting Malaysia’s revenue, Ebitda to reach pre-pandemic levels by 2022

A Genting signage is pictured at a hotel close to Malaysia's border in Singapore April 2, 2015. ― Reuters pic
A Genting signage is pictured at a hotel close to Malaysia's border in Singapore April 2, 2015. ― Reuters pic

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KUALA LUMPUR, April 9 — S&P Global Ratings expects Genting Malaysia Bhd’s (GENM) revenue and earnings before interest, taxes, depreciation, and amortisation (Ebitda) to reach pre-pandemic level by 2022.

The rating agency forecasts GENM’s Ebitda to only reach 60 per cent of the 2019 level in 2021, given the impact of the Covid-19 pandemic on the company’s key gaming and resort operations in Malaysia and the United States.

It said the 2021 level would be exceeded in 2022 with travel restrictions easing towards end-2021 as the pick-up in pent-up demand should underpin the resorts and casino operator’s operational recovery.

Associate director, corporate ratings, Shawn Park said GENM is expected to explore other areas of growth including gaming licence in New York, should it become available.

“And of course, growth and expansion can become good but potentially to become leverage and that is something that the company cannot afford at this point given the current negative outlook,” he said in a webinar on GENM today.

He said the negative outlook on GENM would reflect on Genting Bhd (GENT) as the group’s delayed recovery of operations and elevated capital expenditure (Capex) left it with very limited rating headroom over the next 12-18 months.

He added that GENT’s key credit metrics were expected to only recover in 2022.

Meanwhile, S&P Global Ratings said GENM is likely to bid for additional gaming licences in places such as New York.

It has not specifically factored in any Capex or earnings from these bids as the commercial gaming licence is still pending approval from the state of New York and is subjected to successful bidding by the company.

Nevertheless, it said additional investments aside from the licensing fee are likely to be limited, considering the abundant gaming space in the company’s New York facility, following a recent casino expansion project.

It said GENM’s credit quality is likely to improve over the next 24 months as earnings recover and Capex is limited.

The rating agency believes GENM would focus on deleveraging and improving its balance sheet after a hit in 2020 due to the pandemic.

It said the company’s Capex needs are also likely to decline from 2022 following the completion of Genting Skyworlds which is slated to open in mid-2021.

 

It further forecasted GENM’s ratio of funds from operations to debt, to improve to between five and nine per cent in 2021 and reach 20-25 per cent by 2022 from negative nine per cent in 2020. — BernamaS&P: Genting Malaysia’s revenue, Ebitda to reach pre-pandemic levels by 2022

KUALA LUMPUR, April 9 — S&P Global Ratings expects Genting Malaysia Bhd’s (GENM) revenue and earnings before interest, taxes, depreciation, and amortisation (Ebitda) to reach pre-pandemic level by 2022.

The rating agency forecasts GENM’s Ebitda to only reach 60 per cent of the 2019 level in 2021, given the impact of the Covid-19 pandemic on the company’s key gaming and resort operations in Malaysia and the United States.

It said the 2021 level would be exceeded in 2022 with travel restrictions easing towards end-2021 as the pick-up in pent-up demand should underpin the resorts and casino operator’s operational recovery.

Associate director, corporate ratings, Shawn Park said GENM is expected to explore other areas of growth including gaming licence in New York, should it become available.

“And of course, growth and expansion can become good but potentially to become leverage and that is something that the company cannot afford at this point given the current negative outlook,” he said in a webinar on GENM today.

He said the negative outlook on GENM would reflect on Genting Bhd (GENT) as the group’s delayed recovery of operations and elevated capital expenditure (Capex) left it with very limited rating headroom over the next 12-18 months.

He added that GENT’s key credit metrics were expected to only recover in 2022.

Meanwhile, S&P Global Ratings said GENM is likely to bid for additional gaming licences in places such as New York.

It has not specifically factored in any Capex or earnings from these bids as the commercial gaming licence is still pending approval from the state of New York and is subjected to successful bidding by the company.

Nevertheless, it said additional investments aside from the licensing fee are likely to be limited, considering the abundant gaming space in the company’s New York facility, following a recent casino expansion project.

It said GENM’s credit quality is likely to improve over the next 24 months as earnings recover and Capex is limited.

The rating agency believes GENM would focus on deleveraging and improving its balance sheet after a hit in 2020 due to the pandemic.

It said the company’s Capex needs are also likely to decline from 2022 following the completion of Genting Skyworlds which is slated to open in mid-2021.

It further forecasted GENM’s ratio of funds from operations to debt, to improve to between five and nine per cent in 2021 and reach 20-25 per cent by 2022 from negative nine per cent in 2020. — Bernama

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