Fitch Ratings has affirmed Genting Malaysia’s ‘Long-Term Issuer Default Rating (IDR)’ as ‘BBB/Stable’ while Genting New York was rated RWN due to uncertainties regarding its New York casino licence bid.
Fitch also maintained GENM's Standalone Credit Profile (SCP) at 'bbb-.'
“GENM's IDR is equalised with that of its stronger parent, Genting Berhad (GENT, BBB/Stable), which owns 49% of the company,” based on Fitch's assessment of Genting Berhad's high incentives to support GENM.
Key rating drives for GENM’s ratings included Malaysia’s robust performance, which made up 60% of GENM’s revenue. Revenue rose by 14% year-on-year in H1 2024 as domestic traffic rebounds and there is an increase in international tourists as regional travel continues to recover.
It was also expected for GENM's EBITDA net leverage to drop to around 3.0x by 2026, from about 4.0x in 2023 on higher EBITDA growth.
“We expect GENM's financial structure to improve from our previous forecast of below 4.0x net leverage by 2025,” stated Fitch.
Genting New York (GENNY) however was rated RWN because the evaluation also included the risk that it may not win the bidding process for a full-scale casino licence in New York.
While the bet, if successful, would “boost GENM's geographic diversification and potentially lower the tax on GENNY's gross gaming revenue from around 65%,” there wouldn’t be any impact on GENM's SCP or IDR, or on GENT.”
In its financial review in August, Genting Malaysia saw Q2 revenue rise to RM2.67bn ($0.62bn), while its H1 revenue was RM5.43bn.
