The ‘A3′ issuer rating of Genting Singapore Ltd reflects the company’s liquidity strength, and its capacity to fund the SGD4.5-billion (US$3.3-billion) expansion of its casino complex Resorts World Sentosa “without the need to incur additional debt”, said Moody’s Investors Service in a credit opinion issued on Thursday.
Long-term obligations rated A are considered “subject to low credit risk”, according to the rating agency.
Genting Singapore, controlling one half of Singapore’s casino duopoly, is investing SGD400 million in upgrading some of its attractions and refurbishing three existing hotels at Resorts World Sentosa. These enhancements are part of the SGD4.5-billion expansion plan.
“Given Genting Singapore’s sizable net cash position, it is likely to have sufficient resources to fund the expansion without incurring additional debt,” said Moody’s in its Thursday opinion.
As of end-2021, Genting Singapore had a cash balance of approximately SGD3.3 billion. Moody’s expected the gaming operator to maintain a strong net cash position in 2022 and 2023.
Genting Singapore’s strength in liquidity provided the company “a buffer” in case the recovery in the operating performance of its casino resort complex is slower than expected, said Moody’s.
The rating house estimated Genting Singapore to see its revenue grow from SGD1.07 billion in 2021 to SGD1.61 billion in 2022, and SGD2.23 billion in 2023. The company reported revenue of SGD2.48 billion in 2019, before the onset of Covid-19 pandemic.
The company’s credit outlook was however challenged by its exposure to the “evolving regulatory environment” in Singapore, and to a “geographical concentration risk” as the company generates most of its revenue from Resorts World Sentosa, said Moody’s.
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