Earnings growth supported by rising tourist numbers, along with the completion of major capex projects, is expected to see Macau-based operators successfully deleverage over the next few years. However, the positive tourism affect will be less pronounced across Southeast Asia due to expansion plans and potential M&A, according to Moody’s Ratings.
In a note, Moody’s said it expects both Melco Resorts & Entertainment and SJM Resorts to prioritize debt reduction over the next 12 to 18 months with Melco’s gradual deleveraging to be supported by the completion of major projects, stronger earnings and sustained free cash flow.
SJM’s improvements could be tempered by the planned acquisition of two satellite casinos – Ponte 16 and L’Arc – with deleveraging dependent on earnings accretion generated from these assets, Moody’s analysts said.
