KUALA LUMPUR: RAM Rating Services Bhd (RAM Ratings) has affirmed the AA1/Stable/P1 ratings of Genting Bhd
and Genting Malaysia Bhd (GenM) as well as the issue ratings of their debt programmes.
The rating agency said the affirmation was supported by its expectation that the group’s performance and financial profile would steadily improve over the next three years.
In a statement today, it said Genting met the thresholds for its ratings a year earlier than anticipated in the financial year ended Dec 31, 2022.
"Despite the outperformance, we see slightly slower growth ahead, considering more downside risks from the slowdown in key global economies, keen competition and capacity constraints.
"Revenue and operating profit before depreciation, interest and tax of RM22.4 billion and RM7.1 billion, respectively, in 2022 fiscal year were better than expected, backed by healthier performances from Resorts World Sentosa (RWS), Resorts World New York City and Resorts World Las Vegas (RWLV),” it said.
Operating cost rebasing during the pandemic also benefited earnings, it said.
Moving forward, RAM Ratings expected RWS and Resorts World Genting to stay on the recovery path while key operations in the United States (US) continue to perform well.
However, it noted that weak consumer sentiment and higher labour costs would remain concerns for the United Kingdom segment.
The rating agency said Genting’s net debt of RM19.7 billion as at end-December 2022 was lower than projected, buffered by improved earnings, operating cashflow generation and a slower capital expenditure (capex) outlay.
"Up to 2025, we project annual capex of not more than RM4.5 billion, mainly for the rejuvenation of RWS and yearly dividend payments of up to RM2 billion.
"Net debts, cushioned by improving cash flow generation, will not change significantly,” it said.
The agency anticipated Genting’s net gearing and funds from operations net debt coverage to be better at 0.35 times and 0.45 times, respectively.
RAM Ratings said the commencement of operations at RWLV would further enhance Genting’s business profile.
It said plantation, power generation, property, and oil and gas businesses would also afford the group some degree of diversification.
"Genting’s strong liquidity profile is another key rating strength. As at end-March 2023, the group held RM22.4 billion of cash and cash equivalents against short-term debts of RM2.1 billion.
"GenM’s ratings are aligned with the group’s, considering the close relationship of the two entities and anticipated parental support from the group when required,” it added. - Bernama
