NagaCorp Ltd, the operator of the NagaWorld casino hotel in Cambodia, said revenue for the first half of 2014 increased by 26 percent year-on-year to US$191 million. NagaWorld is the country’s largest casino complex and the only in capital Phnom Pehn.
Revenue growth was helped by a 27-percent jump in year-on-year terms in gross gaming revenue (GGR) to US$180.3 million, the company told the Hong Kong Stock Exchange on Wednesday.
Profit for the period increased by 8 percent from a year earlier to US$67.6 million, decelerating from 20 percent year-on-year in 2013.
Escalating staff costs following expansion of the senior management team likely acted as a brake on first half net profit, as Credit Suisse Group AG predicted last month. Staff costs increased to US$23.7 million in the first six months of 2014 from US$15.5 million a year earlier.
NagaCorp declared an interim dividend of US$0.027 per share.
“The positive results were attributed to higher business volume from the public floor tables and the successful ramp-up of VIP gaming generated through the junket incentive programme,” the casino operator said in the filing.
GGR from gaming tables reached US$139 million in the first six months of 2014, up from US$97.7 million a year ago. VIP gaming jumped 61.3 percent year-on-year in the first half to US$86 million. Revenue in the mass-market segment grew by 19.8 percent.
Revenue from electronic games however fell by 6.4 percent in the period to US$41.2 million.
NagaCorp has a 70-year casino licence in Cambodia that will run until 2065, as well as a 41-year monopoly – expiring in 2035 – within a 200-kilometre (124-mile) radius of Phnom Penh.
Overall, the property had 169 tables and 1,544 electronic gaming machines as of June 30.
NagaCorp said the overseas junket incentive programme launched in March 2013 enabled the company to increase the existing table limits, whilst managing volatility and credit risk.
Tim McNally, chairman of NagaCorp, in May told GGRAsia the company had been expanding table limits for junket partners willing to work on a revenue share basis.
“Total VIP rolling increased by 20 percent to US$2.4 billion and the overall win rate improved significantly from 2.6 percent to 3.6 percent,” the company said in Wednesday’s statement.
The company also announced that it has completed an expansion on level 3 of the hotel block, where it added 47 VIP gaming tables in July, and that it plans to sign up new junket operators to reach the North Asia market, through a new marketing office established in Macau.
The operator is building an extension to NagaWorld scheduled to open in 2017. Naga2 will include more than 1,000 new hotel rooms and luxury suites, up to 300 gaming tables and 500 electronic gaming machines, NagaCorp said. The properties will be linked via NagaCityWalk, a shopping mall due to open in mid-2015.
NagaCorp has plans for a casino resort in Primorye, in the Russian Far East, its first foray outside Cambodia. It said the process of obtaining all necessary permits for the construction of the project “will be completed in about a year”. The Vladivostok project “is not expected to be operational before 2018,” it added.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China