Cambodian casino operator NagaCorp Ltd says preliminary figures show that its NagaWorld casino complex (pictured) in the Cambodian capital of Phnom Penh recorded gross gaming revenue (GGR) of nearly US$1.29 billion in the first nine months of 2019. That represents an increase of 20.2 percent from the prior-year period, said the Hong Kong-listed company in a filing on Wednesday.
NagaCorp added that it had recorded net gaming revenue of US$616.3 million for the nine months ended September 30, up by 28.5 percent in year-on-year terms.
The firm has an exclusive licence to operate casinos in Phnom Penh and its surroundings. It started operations with the NagaWorld property, now referred to as Naga 1, which opened in December 2006. That property now links to Naga 2, an expansion that opened in November 2017. The overall complex is now known as NagaWorld Complex.
“The financial results for the nine months ended September 30, 2019 show that the group continues its journey of growth,” said NagaCorp in its Wednesday filing. The filing featured a voluntary announcement regarding company unaudited operational highlights for the January to September period.
The company said its mass-market table buy-ins rose by 37.9 percent to US$1.22 billion during the period, while the bills-in tally for its electronic gaming machines rose by 27.9 percent to US$2.05 billion.
In the VIP table games segment, its rolling chip turnover rose by 35.3 percent to almost US$33.87 billion.
“The increase in VIP business volume was driven by the continued influx of business visitation, tourists and increased footfall to NagaWorld Complex, in particular Naga 2 where there has been customer demand for higher table limits,” the firm said.
In July, NagaCorp reported net profit of about US$245.1 million for the first six months of the year, a 36.1-percent increase over the corresponding period last year.
The company identified political stability in Cambodia, an improving operating environment, business growth at Naga 2, tourism and the expansion of its VIP gaming business among the reasons for its results for the first nine months of 2019.
NagaCorp said increased tourism to Cambodia, including a 37-percent increase in arrivals from mainland China in the first seven months of this year, had contributed to its business growth.
China provides the bulk of the kingdom’s tourist arrivals and mainland gamblers are widely viewed as the Asia-Pacific region’s most lucrative clients. NagaCorp said there were more than 1.5 million arrivals from the mainland up to the end of July.
The statement to the Hong Kong exchange said Naga 2’s average hotel occupancy rate was approximately 85 percent for the nine months ended September 30.
Naga 3, Naga 1 revamp
The statement offered some new details on NagaWorld Complex’s proposed Naga 3 expansion. Naga 3, to be a mix of gaming and non-gaming, is expected to comprise of two 66-storey hotels, two 45-storey hotels, one 48-storey condominium hotel, one three-level basement and an 11-level multi-entertainment podium.
NagaCorp said it had “started soil tests [for Naga 3] and the selection of suitably qualified regional piling contractors which shall be appointed soon.” The company added that duration of the piling works was “expected to last between 18 to 24 months.”
NagaCorp added that it had recently received “approval in principle” from the local authorities to develop a garden in front of the Naga 3 property. The project would allow the company “to build a three-storey underground car park cum a world-class garden through which Naga 3 shall be connected to [underground shopping mall] NagaCity Walk, Naga 1 and Naga 2,” said NagaCorp.
The firm also stated that the planned refurbishment of 500 hotel rooms out of a total of 750 at Naga 1 was proceeding “smoothly without much interruption” to the company’s operations during the first nine months of 2019.
“It is anticipated that the Naga 1 upgrade project shall be completed with savings” based on the project’s original budget, said the firm. “It is expected that its completion shall contribute positively to the quality, standard and comfort of Naga 1 and hence business of the group.”
In its filing, NagaCorp said that “it is expected that the much-anticipated casino law shall be due to be promulgated [by the Cambodian authorities] by early 2020, which, coupled with the Cambodian government’s recent ban of online gaming, will further strengthen the regulatory environment and governance framework” of the country’s casino sector.
Reports of imminent casino regulation in Cambodia have been circulating for several years. In June 2014, the Phnom Penh Post newspaper had reported that a draft of what it termed a “national casino law” was to have been finalised that year.
Currently, licences and the terms of such licences are issued by the authorities on a case by case basis.
The latest NagaCorp filing did not mention the firm’s investment in a casino resort in the Primorksy Krai region, near the eastern Russian city of Vladivostok. The first phase of the project includes a hotel, casino and a conference hall, and was previously said to be “broadly on schedule for completion in 2019.”
