NagaCorp Ltd, the operator of the NagaWorld casino hotel in Cambodia, reported gross gaming revenue (GGR) of US$271.9 million for the first nine months of 2014, up by 26 percent from a year earlier. Chip roll from junkets and VIPs increased by 25 percent year-on-year to US$4.1 billion, the company said in a filing to the Hong Kong Stock Exchange.
NagaWorld (pictured) is the country’s largest casino complex and the only one in the capital Phnom Penh.
GGR for the third quarter of 2014 reached US$91.5 million, an increase of 23.5 percent from a year earlier, according to calculations based on previous filings.
“The robust volume growth [in the third quarter of 2014] suggests solid execution of Chinese-focussed strategy,” Credit Suisse AG analysts wrote in a note on Monday.
“Positive surprise [in 3Q] came from stronger-than-expected junket volume, +32 percent year-on-year, and stabilisation of EGM [electronic gaming machines] (partly disrupted by renovation in NagaWorld since fist half of 2014),” analysts Kenneth Fong and Isis Wong wrote.
The analysts however trimmed their full year earnings estimate by 5 percent, citing unfavourable luck in the VIP business and soft mass table games revenue.
Mr Fong and Ms Wong expect the VIP business growth in NagaWorld to continue as Macau junkets start to take Chinese high-rollers to the casino resort. NagaCorp announced in August that it had signed agreements with two Macau junkets and more were to be signed.
Credit Suisse said the first of the two Macau junkets – Asia Nation – started contributing to NagaWorld operations from end-August. The casino operator has also made an agreement with Suncity Group, one of the largest junket platforms in Macau.
“Although there is no minimum rolling chips volume requirement for these junkets, we believe the attractive junket commission (70 percent gaming revenue sharing compared with about 45 percent in Macau) is sufficient incentive for the junket to bring the VIP players to NagaWorld,” the analysts wrote in Monday’s note.
“Together with the increasing popularity of Cambodia as a travel destination among the Chinese (Chinese visitation to Cambodia was +17 percent year-on-year in the first seven months of 2014), NagaCorp is set to benefit from the spill-over of Chinese players from Macau,” they added.
