Fitch Ratings says Genting Malaysia outlook ‘stable’

Fitch Ratings recently assessed the outlook of Genting Malaysia Berhad’s (GENM), a Malaysian tourism and gaming conglomerate, as ‘stable’.

GENM’s slower revenue recovery and Empire’s poor metrics have impacted its debt, but parent company Genting Berhad (GENT) remains relatively unaffected due to its robust cash flow diversification.

Genting Berhad reported a 14 percent revenue increase in H1, reaching RM2.47 billion ($531 million), despite a 28 percent drop in adjusted EBITDA to RM447.9 million ($96.43 million).

In Q2, losses in associates, particularly Genting Empire Resorts LLC, totaled RM30.1 million ($6.4 million), mainly due to increased payroll and operational costs.

GENM’s Malaysian revenue for 2022 and H1 2023, contributing over 60 percent of its consolidated figure, fell below expectations due to factors like heavy rainfall and a late 2022 landslide. Fitch revised its revenue projections for 2023 and 2024 to around 90-95 percent of 2019 levels, down from the previous estimate of 95-100 percent. The company anticipates a revenue boost from increased domestic and foreign visitors, supported by the expected repair of the access road by H1 2024.

GENM is pursuing a US casino license. Fitch assigned a ‘BBB-‘ Long-Term Issuer Default Rating to GENM’s subsidiary, Genting New York LLC (GENNY), which faces competition in securing a full-scale casino license. Acquiring a license would provide GENM access to a significant market, geographic diversity, and potentially lower GENNY’s gross gaming revenue tax, albeit with increased capital investment. GENM intends to finance this partly by selling land in Miami, Florida, valued at roughly $1 billion.

Original story by: Asia Gaming Brief