KUALA LUMPUR: Genting Bhd
and Genting Malaysia Bhd face a more challenging deleveraging path as substantial expansion spending and a slower earnings ramp-up keep leverage elevated, according to Fitch Ratings.
In its latest APAC gaming peer credit analysis, Fitch said both companies were rated “BBB-” with a Stable outlook following rating downgrades in September.
It expects high leverage due to their large development projects amid a slower earnings before interest, taxes, depreciation and amortisation (EBITDA) ramp-up.
Fitch expects Genting’s EBITDA net leverage to remain above four times over the next three years, reflecting substantial capital expenditure on key properties in Singapore and New York, as well as a slower-than-expected EBITDA ramp-up at its New York operations due to high start-up costs.
Fitch forecasts Genting’s proportionately consolidated EBITDA net leverage at 4.7 times in 2026, before easing to 4.3 times in 2027, while Genting Malaysia’s EBITDA net leverage is expected to decline from 3.4 times in 2026 to 2.9 times in 2027.
“Genting and Genting Malaysia’s profitability scores reflect EBITDA margins of 25%–30%.
“We expect the free cash flow margin of the two companies to stay negative over the next few years due to substantial expansion capex in major properties in Singapore and New York,” it said.
“We expect Genting’s free cash flow to be negative for the 2026-2028 period, mainly due to the Resorts World Sentosa 2.0 expansion at GENS and refurbishment project in Singapore, asset enhancements at Resorts World Genting in Malaysia, oil & gas projects, and the expansion of casino and related facilities in New York,” Fitch said.
Nevertheless, Fitch said Genting and Genting Malaysia benefit from strong barriers to entry, with Genting Malaysia the sole casino licence holder in Malaysia.
It also highlighted Genting’s geographic diversification across Malaysia, Singapore, the US and UK, alongside its non-gaming businesses.
Meanwhile, SJM Holdings Ltd’s deleveraging is expected to be supported by cost savings from satellite restructuring and lower capital expenditure after 2026.
Fitch said Australia’s Tabcorp Holdings Ltd stood out among its peers with a stronger deleveraging trajectory, having reduced net leverage to below two times in FY25 and FY26.
Universal Entertainment Corp’s downgrade to “CCC+” reflected deteriorating operating performance driven by structural headwinds.
Despite the company-specific pressures, Fitch said regulatory protection remained a key credit strength for the APAC gaming sector, supported by high barriers to entry and exclusive or monopoly licensing structures in several jurisdictions.
