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APAC-facing gaming companies to see 70% aggregated EBITDA decline in 2020: Moody’s

The aggregated EBITDA of gaming companies with exposure to the Asia-Pacific region is tipped to fall by around 70% in 2020, before making a gradual recovery next year, according to ratings agency Moody’s.

In research published last week, Moody’s noted that, “Falling international travel, property closures and the continuance of social-distancing measures across most countries will keep prospects for the gaming sector weak, at least until 2021, given the sector’s sensitivity to consumer demand.”

The assessment relates to nine specific companies covered by the agency: Las Vegas Sands, MGM Resorts, Genting Berhad, Genting Singapore, Melco Resorts & Entertainment, Studio City Finance, Wynn Resorts Finance, NagaCorp and Crown Resorts.

According to Moody’s, aggregated EBITDA of the nine can be expected to decline from US$14.5 billion in 2019 to just north of US$4 billion in 2020 as a result of the COVID-19 pandemic.

However, situation could prove worse than that given Moody’s assumes an earnings recovery will start in the second half of 2020. While 2021 earnings will undoubtedly be lower than in previous years, further downside risk is “significant, particularly if the pandemic is not contained and lockdowns have to be reinstated.”

Moody’s added that Genting Singapore remains the best positioned of the nine to ride out the COVID-19 storm, with sufficient liquidity to last more than three years on zero revenue assuming no dividend payments or expansionary spending. By contrast, it said, Studio City Finance Ltd’s liquidity could run out in less than a year if the current situation doesn’t improve.

Notably, the research did not take into account Galaxy Entertainment Group or any of the four major operators in the Philippines.

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