NagaCorp flags US$95mln impairment on Vladivostok project

Aug 13, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck  

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Hong Kong-listed Cambodian casino operator NagaCorp Ltd says its first-half results will be impacted by a “revaluation” of the group’s stalled casino resort project (pictured in a file photo) at Primorye, near Vladivostok in Russia.

NagaCorp is the operator of NagaWorld, a casino resort monopoly in the Cambodian capital Phnom Penh.

The group said it expects to record either a net profit of US$3.1 million or a net loss of US$6.9 million for the six months to June 30 this year, compared to a profit of approximately US$83.0 million in the prior-year period, according to a Monday filing.

The weakening in its half-year results was due to “preliminary findings from the independent revaluation” of the group’s casino project in Vladivostok, “conducted by an independent firm of valuers” engaged by NagaCorp.

According to the filing, NagaCorp’s board agrees with the findings of the revaluation process, which “indicates an expected impairment of approximately US$85 million to US$95 million for the Vladivostok project”.

“Such impairment was due to an increase in the discount rate used for the purpose of determining the project present value and the lower business volume expected to be generated from the Vladivostok project,” stated the casino firm.

“Notwithstanding the above information, the overall financial position of the group remains healthy,” it added. “The expected impairment is unrealised and does not affect the operational cash flows of the group.”

No such impairment was recorded for the previous financial periods, according to the filing.

Refinancing risks for NagaCorp have “materially reduced” following the repayment of its outstanding senior unsecured notes due in July 2024, said last week S&P Global Ratings.

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