S&P Global Ratings revised on Wednesday to ‘negative’ the respective outlook on Malaysia-listed conglomerate Genting Bhd and its gaming subsidiaries Genting Malaysia Bhd, Genting New York LLC, and Resorts World Las Vegas LLC.
The institution said their credit quality could be weakened over the next two to three years, amid committment to high capital expenditure and other “growth priorities”.
“We estimate the [Genting] group’s total capex [capital expenditure] in 2026 will be double the MYR6 billion [US$1.47 billion] in 2025, and much higher than the MYR4.3 billion in 2024,” said the ratings house.
S&P added: “We expect capex to remain above MYR8 billion annually through 2030.”
Genting’s subsidiaries had “heavy investments” over the next two to three years, the institution remarked.
It included spending for Genting New York LLC – a unit of Genting Malaysia – after it secured a full casino licence for its New York City gaming complex in the United States.
Genting New York’s proposal for Resorts World New York City (RWNYC) entails a US$5.5-billion expansion up to 2030 of the existing venue, and a US$600-million up front licence fee, in exchange for a 30-year licence. The unit said this week that phase one of the expansion might launch as soon as the second quarter next year.
“Spending related to the New York licence facility will on average account for close to 30 percent of the group’s total annual capex over the next two to three years.” stated S&P.
“The spending includes payments for the licence fee, renovation of existing facilities, and building of new ones,” noted analysts Isabel Goh, Shawn Park, and Vernice Tan.
They estimated the New York casino complex’s average annual run-rate for earnings before interest, taxation, depreciation and amortisation (EBITDA) would exceed US$400 million.
Genting Singapore Ltd’s ongoing expansion and upgrade at Resorts World Sentosa, one part of Singapore’s casino-resort duopoly; and the parent Genting Bhd’s MYR3.1-billion takeover bid for Genting Malaysia; also added to the spending burden, the ratings house noted.
“Earnings in Singapore should continue to recover following business disruptions at its brownfield facilities; however, the large investments will run down the company’s cash buffer,” suggested the analysts.
They added: “Given the high spending, we expect Genting Bhd’s discretionary cash flow to remain negative over the next three years.
“This will cause the group’s reported debt to rise toward MYR35 billion by 2028, from MYR21 billion in 2024. As such, Genting Bhd’s leverage (ratio of funds from operations to debt) could fall below 20 percent through 2027.”
The rating agency also remarked that the parent Genting Bhd lacks a “clearly-articulated financial policy”.
“The group’s increased risk appetite is seen in its unexpected debt-funded takeover bid” – so far unrealised – “for Genting Malaysia at a time where the rating headroom is narrowing,” remarked the S&P Global Ratings analysts.
They also said: “Any attempt by Genting Bhd to privatise Genting Malaysia via additional debt to consolidate the U.S. assets could further delay a recovery in leverage, and the group will need to demonstrate its commitment to transparency and deleveraging.”
The rating agency said it expected Genting Bhd’s dividend payout to reduce in size: to below MYR1.5 billion annually through to 2027, versus MYR1.8 billion to MYR1.9 billion in 2023 and 2024, respectively.
“The company has not declared interim dividends for 2025. We understand that the group could also monetise non-core assets through the sale of its land at Miami,” stated S&P Global Ratings.
“However, these alone may not be sufficient to sustainably improve the group’s leverage. As such, we believe Genting Bhd will need to devise other means to reduce its debt,” the ratings agency added.
