Casinos operating in Asia-Pacific (Apac) markets will likely face a drop in EBITDA. Moody’s Investors Service Inc suggested the market with experience a “fall around 70% in 2020 before a gradual recovery in 2021”. It involves several of the well-known groups that operate in the Asia-Pacific region: Genting Singapore Ltd, Crown Resorts Ltd, Las Vegas Sands Corp, Melco Resorts Finance Ltd, MGM Resorts International, Wynn Resorts Finance LLC, NagaCorp Ltd, and Studio City Finance Ltd.
The investigation noted that while the virus outbreak hinders the overall performance, most of the companies have enough liquidity to last for 12 months, stating: “These companies have sufficient cash equivalents and committed facilities to withstand temporary cash burn, which includes operating expenses, interest payments and maintenance capital spending, as well as meet their debt repayments in 2020.”
Genting Singapore was assigned A3 negative rating, an upper-medium grade, meaning the group is deemed to be in a low-risk zone despite its long-term financial obligations. Two of the investigated groups, NagaCorp and Studio City Finance, were given B1 negative rate, and are considered to be high-risk. Moody noted the liquidity for Studio City Finance might run out in less than a year.
Many of the groups are tied to single-country markets and are suffering from the lockdown measure the countries implemented. While the markets are slowly resuming work, it’s unclear if the remaining months will be enough to offset the losses for 2020.