Philippine conglomerate Alliance Global Group Inc could see “sequential improvement” in the fourth quarter, regarding its gaming business interests at the Resorts World Manila (RWM) casino complex (pictured), says Japanese banking group Nomura.
Low leverage at Alliance Global and the casino operation specifically, should help both to “weather the current environment” of business decline at the casino complex, linked to Covid-19, said the institution.
Resorts World Manila, in the Philippine capital, is a venture between Philippine Stock Exchange-listed Alliance Global, and Hong Kong-listed Genting Hong Kong Ltd. The casino complex is operated by Travellers International Hotel Group Inc, which is 70-percent owned by firms associated with the Alliance Global brand, and 30-percent owned by Genting Hong Kong.
The Manila gaming property had a net loss at PHP3.7 billion (US$76 million) for the first half of this year, which was blamed on the pandemic.
Travellers International is no longer listed on the Philippine bourse. But Nomura said Alliance Global’s interest could see some sequential improvement in the fourth quarter for this year, provided Metro Manila’s Covid-19 countermeasures continue to ease.
“Resorts World Manila’s net debt-to-equity has risen slightly to 1.31-times, but does not appear to be under pressure given loan convenants at 2.3-times debt-to-equity,” wrote BDO Nomura Securities, Inc analyst, Thomas Huang, in a Tuesday memo.
The parent, Alliance Global also had a “low leverage” that should allow it to support its subsidiaries if necessary, the Nomura note highlighted. Alliance Global ended the first half of this year with net debt of PHP21.6 billion and net debt-to-equity of 0.07-times, stated Mr Huang.
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