Net profit for 2024 at Cambodian casino resort operator NagaCorp Ltd fell by 38.3 percent year-on-year, though group revenue was up 5.5 percent from the previous year.
Such annual net profit was US$109.6 million, compared to US$177.7 million in 2023. The decline was “primarily attributable” to a non-cash impairment loss of US$89.1 million recognised on the group’s casino construction project at Primorye, near the Russian Pacific port city of Vladivostok.
The Hong Kong-listed firm has a long-life casino monopoly in the Cambodian capital Phnom Penh, where it runs the NagaWorld casino resort (pictured).
Group-wide revenue for 2024 was US$562.5 million, versus US$533.2 million a year earlier, it said in a Tuesday filing after market hours.
NagaCorp’s 2024 earnings before interest, taxation, depreciation, and amortisation (EBITDA) were down 31.3 percent year-on-year, to US$202.8 million, which it said was mainly due to the Russia scheme impairment.
NagaCorp did not make any recommendation for a dividend, which had also been its approach in 2023.
Gross gaming revenue (GGR) for 2024 increased by 5.5 percent year-on-year to US$542.9 million.
Mass market table revenue rose 28.4 percent from a year earlier, to US$269.3 million.
In the mass segment, the increase in business volumes “was attributed to the stable visitation by a reasonably sized expatriate community, visitors from ASEAN and to some extent the ongoing recovery of Chinese visitors patronising NagaWorld in search of entertainment,” said the firm in commentary.
Mass-market electronic gaming machine revenue went down 1.3 percent year-on-year, to just under US$125.7 million.
Revenue from premium VIP – the company’s name for its in-house VIP business – declined 22.9 percent year-on-year, to just below US$103.1 million.
Revenue from referral VIP – involving collaboration with outside parties – rose 1.4 percent year-on-year, to US$44.8 million.
In commentary on the 2024 performance, the group said average daily business volumes for the mass market saw a 8.2 percent year-on-year rise, from US$9.9 million to US$10.7 million, representing a recovery rate of 89.1 percent on levels observed in 2019, the trading year before the Covid-19 pandemic.
NagaCorp stated: “This growth was primarily attributable to the stable and increasing headcount at NagaWorld, underscored by the resilience of the captive domestic market comprising a reasonably-sized expatriate community.”
It added that recovery of visitor volume via Phnom Penh International Airport, at 84.6 percent of 2019 levels, “further supported this positive trend”.
Business and leisure travel recovery
NagaCorp stated that average daily rolling chip volume in premium VIP recovered to 82.5 percent of pre-pandemic level.
“This performance was largely driven by the ongoing return of business travellers to Cambodia and conversion of some former referral VIP players into direct premium VIP players,” stated the operator.
“The group observed that business travellers typically have greater spending capacity and tend to stay for extended periods with frequent repeat visits,” it added.
NagaCorp noted that average daily GGR for its referral VIP segment saw 1.2 percent year-on-year gain during the year, supported by 4.6 percent improvement in rolling volume.
It added that average daily rolling volume in the segment increased sequentially by 40.2 percent to US$6.3 million in the second half, compared to US$4.5 million in the first half of the year.
“This sequential growth can be attributed to the ongoing gradual return of both leisure and business travellers visiting NagaWorld for high quality entertainment,” said the firm.
It added: “The group will maintain its strategic focus on pursuing and working with reputable referral VIP agents.”
In January this year, Cambodia recorded 611,894 international tourist arrivals, with Thailand, Vietnam and China the top-three feeder markets.
In its overview, the company further stated, referring first to an extension to its NagaWorld complex in Phnom Penh, and second to the stalled Russian scheme: “There has been no material update in relation to the Naga 3 project and the Vladivostok project during the year.”
Last year, the group said it was likely to reduce the cost and scale of Naga 3.
As of December 31, the group had cash and deposits of US$120.6 million. It noted that during the reporting year it had fully repaid the outstanding principal amount of US$472.2 million on its 2024 senior notes together with the interest accrued to the maturity date.
As a result, the company “does not have any debt obligations, other than the outstanding shareholder’s loan”.
That was a reference to a US$70-million loan at 8 percent annual interest under an agreement with CLK Capital, wholly-owned by the Sakai Trust, a vehicle set up by the group’s late founder, Chen Lip Keong.
