GGRAsia – NagaCorp 1Q EBITDA at US$59mln as staff costs bite

NagaCorp 1Q EBITDA at US$59mln as staff costs bite

Apr 04, 2023 Newsdesk Latest News, Rest of Asia, Top of the deck

First-quarter casino gross gaming revenue (GGR) at Cambodia operator NagaCorp Ltd rose by 6.8 percent year-on-year, to nearly US$117.0 million, according to a non-statutory filing on its quarterly results made to the Hong Kong Stock Exchange on Monday.

The company said the win rates in the first quarter this year “were generally lower as compared to last year due to luck factor”.

The firm reported earnings before interest, taxation, depreciation, and amortisation (EBITDA) of US$59.0 million in the three months to March 31. That was down 3.3 percent as compared to the prior-year period “due to an increase in staff cost and luck factor,” it stated.

NagaCorp has a long-life monopoly licence for casino operations in the Cambodian capital Phnom Penh, where it runs the NagaWorld complex (pictured).

The group said in its Monday statement that by other measures, namely average daily business volumes, in the form of table game buy-ins, bills-in at slot machines, and “rollings” in premium VIP and referral VIP, its first-quarter business had showed gains.

The average daily buy-in and bills-in aggregate was just under US$9.8 million, up 16.8 percent on the prior-year period, said the company. The segment’s GGR however fell by 3.9 percent year-on-year, to US$76.6 million in first-quarter 2023.

NagaCorp said that in the first quarter this year its average daily mass-market business volumes “have already recovered to 81.0 percent of financial year 2019 level”, the trading period before the onset of the Covid-19 pandemic.

The average daily rolling volume in its premium VIP segment was just above US$10.8 million, up 43.9 percent year-on-year. Judged in quarterly GGR terms, premium VIP was up 11.9 percent from a year earlier, to US$28.6 million.

The firm stated that the “accelerated growth” in its premium VIP business was partially due to the “successful conversion of previous referral VIP players into direct premium VIP players”.

Average daily rolling volume in referral VIP was US$4.3 million, up 117.9 percent from first-quarter 2022, and 22.6-percent higher sequentially. The segment’s GGR stood at US$11.8 million for the three months to March 31, up 175.6 percent from a year ago.

The company said it received an increasing number of referral VIP market patrons, particularly from its “neighbouring countries such as Thailand, Malaysia and Singapore”.

NagaCorp’s management said in Monday’s filing it had observed a “continuing increase” in the number of customers to its property, “especially Chinese visitors in March 2023 after the Chinese government allowed tour groups to Cambodia since February 2023”.

“Our hotel occupancy has also recorded the highest occupancy rates in March 2023 since January 2021,” it added.

NagaCorp reported a net profit of nearly US$107.3 million for full-year 2022, compared to a loss of US$147.0 million in the prior year. Such profit was on revenue that rose by 104.0 percent year-on-year, to US$460.7 million.

Moody’s Investors Service said in a recent report that it had placed NagaCorp’s ‘B2’ corporate family rating on review for downgrade, on what it said was “heightened refinancing risk” for the Hong Kong-listed firm. “The ratings review reflects the likelihood of a downgrade if NagaCorp fails to make substantial progress over the next three months to refinance its outstanding US$472 million bond coming due in July 2024,” stated the ratings agency.