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Cambodian casino operator NagaCorp boasts big profits

Fri, Jul 26, 7:54am by Staff Writer

Cambodian casino operator NagaCorp saw its profit jump by more than a third in the first half of 2019 as both the VIP and mass market gaming segments continue to shine.

The Hong Kong-listed company reports that its gross gaming revenue rose 22 per cent year-on-year to US$872.4 million in the six months ending June 30, with earnings jumping 41 per cent to $327.8 million and net profits rising 36 per cent to $245.1 million.

Calvin Ayre reports that while the revenue growth rate has slowed significantly from 85 per cent in 2018, the company is well on face to break 2018’s record revenue performance of $1.4 billion and profit of $390 million.

NagaCorp, whose NagaWorld property holds a casino monopoly in Cambodia’s capital Phnom Penh, reported VIP gambling turnover of nearly $23.2 billion, a 38 per cent jump on the same time last year.

VIP revenue rose by a more modest, but still impressive 18 per cent as VIP win rate dropped from an above average 3.3 per cent to 2.8 per cent over the same period.

NagaCorp’s VIP business benefited from two junket operators, Tak Chun and Guangdong Group commencing fixed-base operations at NagaWorld’s Naga2 addition during H1.

In addition, the Suncity Group shifted its Naga2 operation to a dedicated larger space with more VIP tables and other supporting entertainment facilities.

As for the mass market gaming segment, public floor table buy-ins were up 32 per cent to $756.3 million, while mass table revenue rose 45 per cent to $146.2 million thanks to mass table win jumping 1.7 points to 19.3 per cent.

Gaming machines big reason behind boost

Mass electronic gaming machine bills-in rose 29 per cent and electronic gaming machine revenue improved 27 per cent to $76.3 million.

The mass gains were attributed to Cambodia’s international tourism arrivals rising 11 per cent to 2.9 million in the first five months of 2019.

The growth was spiked by a 40 per cent rise in visitation from China, which accounted for 38 per cent of all international arrivals over that span.

Vietnam (11 per cent) and Laos (7 per cent) were the next highest countries supplying tourists to Cambodia.

Despite the gaming surge, non-gaming revenue was essentially flat at $19.2 million in H1, although the company claimed a gross profit of $16.2 million off this segment on a not too shabby 84 per cent margin.

NagaCorp humble-bragged that its market capitalisation stood at approximately $6 billion as of July 23, a 13 times boost from the value at the company’s initial public offering nearly thirteen years ago.

The company also said it was better situated than some of its rivals to survive the ongoing trade war between China and the US, in part due to Cambodia’s close geopolitical relationship with China.

NagaCorp credited the Naga2 extension with accelerating visitation growth, leaving the company all the more excited about its proposed $3.52 billion Naga3 expansion.

The company’s CEO Dr Chen Lip Keong has promised to fund half the project’s costs, for which his stake in the firm will be elevated from 66.1 per cent to nearly 73.2 per cent.

On Monday, NagaCorp announced that Steelman Partners LLP would handle the design of Naga3.

Steelman, which has vast experience designing casino projects in Macau, Vietnam, the Philippines and Saipan, also worked on the design of NagaWorld’s previous two phases.


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