Genting Berhad.

Overview Key strengths Key risks Monopoly in Malaysia and dominance in Singapore's duopoly market. Prolonged recovery in gaming revenue as consumer pockets shrink and travel fears persist amid COVID-19. Above-average profitability underpinned by favorable tax jurisdictions. Focus on geographical expansion could increase leverage. Positive free cash flow over the next two to three years, following completion of major investment projects. Empire Resorts Inc.'s highly leveraged financial position could require support. Contributions from Resorts World Las Vegas LLC (RWLV) to support earnings growth and diversity. The business environment is improving in various countries, with increased visits and easing capacity restrictions. We expect EBITDA to recover to about 80% of pre-pandemic levels in 2022. This should help to stabilize the company's credit

...Genting Bhd.'s (GENT) operations should continue to recover through 2022 and return to pre-pandemic (2019) levels in 2023. The business environment is improving in various countries, with increased visits and easing capacity restrictions. We expect EBITDA to recover to about 80% of pre-pandemic levels in 2022. This should help to stabilize the company's credit quality, despite elevated debt. In our view, the group's debt-to-EBITDA ratio will be 3.0x-3.5x in 2022 and 2.3x-2.8x in 2023. Its ratio of funds from operations (FFO) to debt will likely be 19%-21% in 2022 and 24%-26% in 2023. This compares with a 1.3x debt-to-EBITDA ratio and 47.5% FFO- to-debt ratio in 2019. GENT's lower capital spending and recovering earnings should support its credit quality. We estimate capital spending will decline to Malaysian ringgit (MYR) 3.3 billion-MYR3.5 billion in 2022 from MYR8.9 billion in 2021. This follows the completion of major investment plans in the U.S. and Malaysia. Based on the group's operating...

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