Cambodian gaming operator NagaCorp Ltd. generated US$184.2 million (MOP1.47 billion) in net profit for the whole of 2016, jumping 7 per cent year-on-year due to increases in its casino earnings.
According to its annual results announced to the Hong Kong Stock Exchange on Wednesday night, the operator’s earnings before interest, tax, depreciation and amortization (EBITDA) registered an increase of 12 per cent year-on-year to US$256.1 million.
For the year, gaming revenue via its casino-resort NagaWorld in the capital city Phnom Penh, reached some US$500.8 million, growing 4.2 per cent from US$480.8 million for 2015, accounting for 94 per cent of its total.
In particular, that derived from the mass market recorded an increase of 6.8 per cent year-on-year to US$275.2 million, while VIP business posted 1.2 per cent growth to US$225.7 million for the year.
The company explained in the filing that the improvement in the mass market segment is attributable to visitor growth in the Southeast Asian country in the year that ‘increased footfall into NagaWorld.’
The casino property’s VIP rolling totalled US$8.7 billion for the year, up 11 per cent year-on-year, although the win rate of the segment dipped 0.2 percentage points to 2.6 per cent.
Meanwhile, buy-ins for mass market tables grew by 12 per cent year-on-year to US$617.8 million and bills-in for electronic gaming machines rose 9 per cent to US$1.5 billion.
As at the end of the year, NagaWorld operated 241 gaming tables in addition to 1,648 electronic gaming machines.
‘The group aspires to further penetrate the regional VIP market by offering attractive commercial terms to junket operators and agents as a result of NagaWorld’s low cost structure,’ it said in the filing.
The company’s non-gaming revenue generated by hotel, food & beverage and entertainment surged 33 per cent year-on-year to US$30.7 million for the year, primarily driven by ‘higher occupancy and average rates as well as better performance across all the food and beverage outlets,’ it said.
Beneficiary
The Cambodian company expects its casino business to continue benefiting from the growth of visitors to the country.
‘In order to provide convenience for investors and increase investment in Cambodia, the government of Cambodia is now offering three-year, multiple-entry visas to Chinese, South Korean and Japanese investors,’ the company said. ‘Poised to benefit from this growth is NagaWorld, which is one of the main tourist destinations located in the city centre of Phnom Penh and the entertainment centre for the Mekong region.’
In addition, it foresees the opening of the TSCLK Complex – also known as Naga2 and located next to NagaWorld – will ‘enhance NagaWorld’s appeal to both the mass market and VIP market across the region.’
The filing reads that the TSCLK Complex is undergoing fit-out and is expected to be operational in 2017.
For the company’s new casino-resort project in the Russian city of Vladivostok, piling work on the site commenced last year, while an office has been established in the city centre, the company said in the filing, expecting the company to be operational in 2019.
‘The Group believes that its strategy to diversify its business geographically and expand into new casino markets will drive revenue growth in the long term,’ it wrote.
