Moody’s affirms Genting Singapore Limited (GENS‘) A3 rating with a stable outlook and it reflects the company’s 100% ownership of the integrated resort Resorts World Sentosa (RWS) and duopoly market position as one of two licensed casino operators in Singapore. These factors support GENS’ ability to generate strong earnings and cash flows.
We expect GENS to generate around SGD1.2 billion of EBITDA in 2024, a modest increase from last year as demand has moderated amid economic uncertainty. At the same time, GENS’ operating capacity has been temporarily reduced because of the closure of a hotel for renovations.
Nonetheless, we project its EBITDA will rise to around SGD1.3 billion in 2025 as new attractions open in phases and its capacity recovers.
GENS expansion
GENS is expanding and refreshing its offerings at RWS in phases for a total cost of SGD6.8 billion, which includes the amount already spent. Although the amount is significant, the capital expenditure will be spread across multiple years, peaking at an estimated SGD1 billion per annum between 2027 and 2029.
The company will likely fund its capital spending using internal cash sources. Consequently, GENS’ credit metrics and liquidity will remain strong because the company has minimal debt and sizable cash holdings of SGD3.7 billion as of June 2024.
GENS’ A3 rating also considers the relationship between the company and its ultimate parent GENB. GENS is rated two notches higher than GENB, reflecting its stronger credit quality and a degree of independence from its parent as a listed company.
However, the gap between the two companies’ ratings could narrow if there is reduced independence in decision making at GENS, resulting in increased cash leakage from GENS to GENB in the form of dividends or through other measures.
The stable outlook reflects our expectation that GENS’ earnings and cash flow will continue to grow and that the company will maintain excellent liquidity while executing on its expansion plans. At the same time, GENS rating is constrained by the risks stemming from its parent GENB, which has weaker credit quality.
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