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Malaysia – Revenue recovery will allow Genting to restructure its debt

By - 9 November 2022

Fitch ratings believes that improved revenues in Malaysia and Singapore will allow Genting Berhad to pay off debt and deleverage from its current capex requirements.

The operator of Resorts World Genting in Malaysia and Resorts World Sentosa in Singapore should be able to come down from 4.0x net debt/EBITDA in 2021 to 2.8x by 2024 in Malaysia and from 4.2x to 3.2x in Singapore. Fitch believes revenue will be back at 75 per cent of pre-pandemic levels this year in Malaysia and up to 95 per cent in 2023. With its greater reliance on international tourism, Singapore will take longer to recover, hitting 65 per cent of 2019 revenues this year, and increasing back up to 90 per cent in 2023 with a full recovery the year after.

Fitch stated: “Our revenue growth estimates incorporate receding COVID-19 risks and the easing of preventive restrictions. EBITDAR margins have also benefitted from a sharp cut in the workforce in Malaysia to mitigate the pandemic’s impact. We expect a slower, but steady, EBITDAR recovery in Singapore than in Malaysia and the US, due to a higher dependence on foreign visitors and the hit from an increase in gaming tax from 2Q22.”

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