NagaCorp circa US$1mln 1H loss on Russia impairment

Aug 28, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck  

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Cambodian casino operator NagaCorp Ltd reported a loss of US$963,000 for the first half this year, compared to a profit of nearly US$83.0 million in the prior-year period.

The firm noted in a Tuesday filing to the Hong Kong Stock Exchange: “During first half 2024, the company recognised a non-cash asset impairment loss on the group’s gaming and resort project in Vladivostok, Russia, of US$89.1 million.”

It added that excluding that factor, it would have recorded a net profit 6.2-percent higher than in first-half 2023.

The company has a casino monopoly running to the end of the year 2045 for the Cambodian capital, Phnom Penh, where it operates the NagaWorld complex (pictured).

Group revenue for the first six months this year grew 11.3 percent year-on-year, to nearly US$292.8 million.

The firm said a 61.3 percent year-on-year decline in interim earnings before interest, taxation, depreciation and amortisation (EBITDA), to circa US$55.5 million, was due to the non-cash impairment loss on the Russia scheme.

Gross gaming revenue (GGR) from the NagaWorld operation rose 12.3 percent year-on-year, to nearly US$283.4 million in the six months to June 30.

Mass-market table revenue jumped 33.1 percent year-on-year, to US$130.6 million. Mass-market electronic gaming machine revenue went down 5.5 percent, to US$61.3 million.

NagaCorp said in its analysis of the results regarding mass play: “The increase in business volumes was attributed to the reasonably sized expatriate community, visitors from ASEAN” – a reference to neighbouring Southeast Asia nations – “and to some extent the recovery of Chinese visitors patronising NagaWorld in search of entertainment.”

First-half revenue from the house-managed VIP segment – which NagaCorp calls “premium VIP” – was almost double that of revenue from the VIP segment introduced to the company from outside, which it calls the “referral VIP” segment.

“This performance was on the back of the return of business travellers to Cambodia and ongoing conversion of some previous referral VIP players into direct premium VIP players,” said the company.

VIP outlook, Naga 3, liquidity

Premium VIP revenue was US$60.3 million, down 4.1 percent year-on-year, on rolling volume that stood at nearly US$1.81 billion, which was down 11.7 percent from first-half 2023.

Referral VIP revenue was US$31.1 million, up 17.6 percent year-on-year, on rolling volume of just under US$819.6 million, a decline of 12.7 percent from the first six months of last year.

“Average daily rollings increased sequentially quarter-on-quarter by 33.3 percent to US$5.1 million in second-quarter 2024,” said the firm.

“This can be attributed to the ongoing gradual return of both leisure and business travellers patronising NagaWorld in search for high quality entertainment offerings,” it added.

The company said regarding the Naga 3 extension to its NagaWorld complex: “The foundation and structural works for the basement floors of the Naga 3 project have been broadly completed.

“Clearing, cleaning and defect rectification works are ongoing and are expected to be fully completed by the fourth quarter of 2024.”

In February, NagaCorp said it anticipated reducing the scale and budget for Naga 3.

In terms of the company’s liquidity position, the firm said in its Tuesday filing that as of June 30, its cash and deposits amounted to US$570.8 million.

The company noted that on May 31, it drew down US$70 million of a shareholder’s loan from CLK Capital – directly and wholly owned by a trustee of The Sakai Trust, which is in turn a controlling shareholder of the company – for the purpose of discharging outstanding 2024 senior notes that matured on July 6.

It stated: “Subsequently, the company fully repaid the outstanding principal amount of US$472.2 million of the 2024 senior notes together with the interest accrued to the maturity date.

“Following the full repayment of the 2024 senior notes, the company does not have any debt obligations, other than the outstanding shareholder’s loan,” it added.

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