KUALA LUMPUR (July 23): Moody's Investors Service, which announced today the completion of its periodic review of the rating of Genting Bhd, said its Baa2 rating reflects the holding company status, including full control of Genting Overseas Holdings Ltd and that the holding company generates most of its cash flow in the forms of fees and dividends from Genting Malaysia Bhd and Genting Singapore Ltd.

In a statement, Moody’s analyst Junling Tan said the rating of Genting also incorporates Moody's expectations of a weaker operating performance and the temporary closure of the casino and hotel operator's integrated resorts worldwide amid the Covid-19 outbreak.

"Although the integrated resorts have reopened, the pace of recovery in its operating performance currently remains uncertain,” Tan said.

"The rating also captures the execution and financial risks associated with Genting's strong appetite for expanding its gaming franchise in the US and Asia. 

"While such projects are likely to be large in scale and could consume operating and financial resources over the medium term, we expect Genting to prudently manage its finances and investment strategies to contain the risks associated with its expansion plans,” Tan said.

On the completion of the periodic review of the rating of Genting, Tan said it was conducted through a portfolio review in which Moody's reassessed the appropriateness of the rating in the context of the relevant principal methodologies, recent developments, and a comparison of the financial and operating profile with those of similarly rated peers.

"The review did not involve a rating committee. Since Jan 1, 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.

"This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement,” the analyst said.

Genting's 49.52%-owned associate Genting Malaysia said in its latest investor presentation dated July 8, 2020 that the full extent of the impact of the Covid-19 pandemic on the group's operations was uncertain at this juncture.

Genting Malaysia said implementation of aggressive cost-control measures would continue across all its operating entities.

"Health and safety remain a key priority," Genting Malaysia said.

On Bursa Malaysia today, Genting Malaysia shares were traded unchanged at RM2.37 at 4.11pm, with a market capitalisation of RM13.39 billion.

At 4.12pm, Genting's share price had gained eight sen or 2.07% to RM3.95, with a market value of RM15.17 billion.