GEN Capital Costs, Cash Flows To Cover Dividend: Moody’s

Moody’s Investors Service Inc. says Genting Singapore, the operator of the resort World Sentosa casino complex (pictured) in Singapore’s Dupoli market, expects to generate S$1.4 billion ($1 billion) in operating cash flow “by December 2024.

Moody’s added: “This amount, along with the company’s cash balance, will be sufficient to cover estimated capital expenditure of approximately S$1 billion, estimated dividends of approximately S$6 billion and minimum debt repayment.”

According to the rating agency, Genting Singapore had a “strong net cash position” as of June 30, with “a cash balance of about S$3.4 billion, compared with a charter debt of only S$3 million.”

The agency said its A3 issuer rating for Genting Singapore reflected 100% ownership of Resorts World by Sentosa Pte Ltd., which operates Resorts World Centosa, and “reflects our expectation that Genting Singapore will continue to have full access to the resort’s cash flow.”

Genting Singapore has pledged to the Singapore government to spend S$4.5 billion on the phased expansion of the resort World Centosa, commonly referred to as “RWS 2.0.”

The casino company has “enough liquidity” to fund the ongoing expansion at Resorts World Sentosa “without generating additional debt,” according to Moody’s.

“We expect capital expenditures of approximately S$320 million in 2023 and S$800 million in 2024,” it added. “While construction of Minion Land and Singapore’s Ocean Aquarium is underway, other components of the expansion project are awaiting government approval and are expected to begin in 2024.”

Genting Singapore announced interim dividend for the first phase of tax exemption of S$0.015 per common share to be paid on Sept. 22 in its first half results.

In an update on Wednesday, Moody’s predicted that Genting Singapore’s earnings before interest, taxes, depreciation and amortization (EBITDA) “will rise from about S$840 million in 2022 to about S$1.1 billion in 2023 and 2024 as it benefits from the ongoing recovery of the Singapore tourism sector.”

From January to the end of August, Singapore recorded 9.01 million visitors, up 204.5% year-on-year.

Moody’s noted that Singapore had 1.4 million international visitors arriving in July 2023, “equivalent to 79% of the month in 2019 before the coronavirus pandemic.”

The rating agency said: “We do not anticipate a return to 2019 levels over the next 12 to 18 months as Genting Singapore continues to face higher utility, labor and casino tax rates since March 2022.”

BY: 슬롯머신

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