Moody’s Investors Service Inc says declining gaming revenues in Macau are credit negative for rated gaming companies in the Melco Crown Entertainment Ltd group, including MCE Finance Ltd (Ba3 positive), Melco Crown (Macau) Ltd (Ba3 positive), and Studio City Finance Ltd (B2 stable).
“A weaker operating environment will make it more challenging for Studio City Finance to ramp up its Studio City project [pictured], which is scheduled to open in mid-2015, and to realise its revenue growth and de-leveraging plan in the next one to two years,” said Moody’s in a note issued in Hong Kong on Tuesday.
Last year Melco Crown parent said that it was increasing the budget for Studio City by 15 percent, to US$2.3 billion.
“Declining gaming revenue will weaken the companies’ revenue and EBITDA [earnings before interest, taxation, depreciation and amortisation] generation, which in turn diminishes their debt-servicing capacity,” said Kaven Tsang, a Moody’s vice president and senior analyst, in Tuesday’s note.
“Nevertheless, MCE Finance’s established operations and strong financial profile will buffer it from a slowing market,” added the analyst.
MCE Finance had cash and deposits of around US$1.3 billion and undrawn banking facilities of US$401 million as of September 30, said Moody’s. That fully covers the firm’s capital expenditure commitments of US$400 million to US$500 million – as estimated by the ratings agency – as well as debt repayments of US$257 million for the coming 12 months.
Macau’s casino regulator, the Gaming Inspection and Coordination Bureau, on January 2 reported that Macau’s gross gaming revenue (GGR) for 2014 fell 2.6 percent year-on-year to MOP351.52 billion (US$44.0 billion). It was the first annual contraction in GGR since records began in their current form in 2005.
Sep 19, 2018Nowadays, millennials, people who were born in the 1980s or...
Aug 16, 2018Food and drink have been heavily marketed as part of Macau...
Jun 27, 2018Macau’s gaming law needs to be amended in order to...
Nov 14, 2018Fitch Ratings Inc says the proposals in Malaysia’s budget for 2019 are likely to have only a “limited impact” to Genting Bhd, the parent of Genting Malaysia Bhd. The latter runs the Resorts...
Nov 14, 2018
Nov 14, 2018
Year-on-year decline in net profit reported by Asian casino operator Bloomberry Resorts in the third quarter