The gaming sector continues to be significantly affected by coronavirus pandemic.
The gaming sector continues to be significantly affected by coronavirus pandemic.

Virus-induced earnings plunge for A-Pac gaming companies, recovery likely in 2021

ANI | Updated: Jun 25, 2020 12:42 IST

Singapore, June 25 (ANI): Falling international travel, property closures and continuance of social-distancing measures across most countries will keep prospects for the gaming sector weak at least until 2021, according to the latest sector in-depth report by Moody's Investors Service.
Given the sector's sensitivity to consumer demand, all nine gaming companies with operations in the Asia Pacific have negative outlooks. The negative outlooks reflect uncertainties around the reopening of casinos and the pace at which operating performance will recover.
Aggregated earnings before interest, taxes, depreciation and amortisation (EBITDA) of gaming companies with exposure to the Asia Pacific will fall around 70 per cent in 2020 before a gradual recovery in 2021, said Moody's.
Before the virus outbreak, most rated gaming companies had either started or committed to significant expansionary projects amounting to a total of around 20 billion dollars over five years.
Despite current disruptions, most companies will likely continue pursuing these projects once operations normalise because of their expectation for an eventual sector recovery or commitment made with regulators or both.
"We expect an increase in capital spending to lead to debt levels staying elevated because some companies will draw down on project financing loans to complete ongoing developments. Others could deploy the additional liquidity raised for expansion, said the report.
Gaming operations in Asia Pacific markets are gradually reopening. Genting Berhad's Malaysia-based casino Resorts World Genting reopened on June 19 but entry is restricted to members. Crown Resorts' Perth casino will resume operations on June 27.
The casinos in Macao had reopened after a brief 15-day closure in February but gross gaming revenue for the three months of March to May plunged 90 per cent from a year earlier. (ANI)

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