Credit agency warns aggressive expansion and elevated capex could pressure cash flow and weaken leverage metrics over the next three years
S&P Global has revised its outlook on Genting Group companies from stable to negative, citing concerns that the conglomerate’s ambitious expansion strategy and sharply rising capital expenditure will place sustained pressure on cash flow generation and credit metrics in the medium term.
In its assessment, the ratings agency highlighted that Genting’s key operating subsidiaries are entering a period of intensive investment, with multiple large-scale projects progressing simultaneously across several jurisdictions. These include expenditure linked to Genting’s newly secured full casino licence in New York, the major expansion of Resorts World Sentosa in Singapore, and Genting Energy’s floating liquefied natural gas (FLNG) project in Indonesia. The investment programme is further compounded by Genting Bhd’s RM3.1bn (US$650m) takeover bid for Genting Malaysia, which S&P described as an unexpected and debt-funded move.
According to the agency, total group capital expenditure is forecast to double from the RM6bn planned for 2025 and remain above RM8bn per year through to 2030. Approximately 30% of this spending over the next few years is expected to be allocated to the New York project alone, covering licence fees, renovations of existing facilities and new construction works following the award of the full gaming licence.
S&P cautioned that the scale and timing of these investments mean incremental earnings are unlikely to keep pace with rising debt levels. While Genting’s New York operations could ultimately generate more than US$400m in annual EBITDA once fully operational, other projects will take longer to contribute. In particular, the FLNG facility in Indonesia is not expected to produce meaningful cash flow until at least mid-2027. Meanwhile, cash buffers at Resorts World Sentosa are anticipated to decline during the construction and expansion phase.
As a result, Genting Bhd’s discretionary cash flow is projected to remain negative for the next three years. Group debt is forecast to increase significantly, reaching approximately RM35bn by 2028, up from around RM21bn in 2024. S&P also warned that the group’s funds from operations (FFO) to debt ratio could fall below 20%, a threshold the agency considers inconsistent with an investment-grade credit profile.
The agency further noted that Genting’s growth-driven strategy, combined with the absence of a clearly articulated financial policy and the sudden bid for Genting Malaysia, has reduced predictability around future leverage levels. In addition, sizeable debt maturities loom in 2027, including US$1.5bn in guaranteed notes at Genting Overseas Holdings, which will require timely and successful refinancing.
Despite revising the outlook to negative, S&P affirmed the existing group credit ratings. The agency cited the strong market position of Genting New York and the strategic importance of core assets such as Genting Malaysia, Resorts World Las Vegas and Genting New York to the parent group.
S&P indicated that a downgrade could follow if leverage metrics remain weak or if earnings from major projects fall short of expectations. Conversely, the outlook could return to stable if Genting demonstrates stronger financial discipline and maintains its FFO to debt ratio above the 20% level.
