NagaCorp, the prominent Cambodian gaming operator, has experienced a significant financial turnaround, reporting a slight loss of $963,000 for the first half of 2024. This marks a stark contrast from the $82.97 million profit recorded during the same period in 2023. The company had previously braced investors for potential losses, citing financial strains largely due to an impairment related to its Vladivostok project in Russia.
The Vladivostok project, which has been indefinitely suspended amid various uncertainties, was hit with an $89.11 million impairment loss during the period. This impairment was anticipated, falling within the expected range of $85 million to $95 million, based on evaluations by an independent firm. Excluding this impairment, NagaCorp would have posted a net profit of $88.1 million in the first half of 2024.
Growth in Mass Market Gaming
Despite the financial setbacks, NagaCorp saw a 12 percent increase in gross gaming revenue (GGR), reaching $283.39 million, according to Asia Gaming Brief. This growth was primarily fueled by a robust performance in the mass market segment, which saw a 33 percent rise in public floor tables revenue to $130.61 million. However, revenue from electronic gaming machines dipped by 5 percent to $61.33 million.
The company attributes this overall increase to the steady flow of expatriates and visitors from ASEAN countries, coupled with a partial recovery in Chinese tourism, enhancing the patronage at NagaWorld in Phnom Penh.
However, while the mass market flourished, the VIP segment showed modest growth. Premium VIP revenues slightly declined by 4.1 percent to $60.33 million, with a corresponding 11.7 percent drop in rolling chip volumes. Despite these reductions, the win rate for Premium VIP improved to 4 percent from 3.7 percent the previous year.
Conversely, the Referral VIP segment exhibited a 17.6 percent revenue increase to $31.1 million, even as rolling chip volumes decreased. The improved win rate of 3.8 percent in the first half of 2024 from 2.8 percent in 2023 bolstered this segment.
Long-term Prospects and Developments
Looking ahead, NagaCorp remains optimistic about its growth trajectory, especially with the ongoing economic recovery and political stability in Cambodia. The tourism sector’s rebound, driven by the resurgence of international travel, is expected to benefit NagaWorld significantly, as it continues to draw visitors seeking premium entertainment and lifestyle experiences.
The development of the $3.5 billion Naga 3 project in Phnom Penh is progressing, with major structural works nearing completion. However, the opening date has been pushed back to September 2029. This project is seen as a strategic expansion that will further cement NagaCorp’s position in the regional tourism and entertainment landscape.
In summary, while NagaCorp navigates through financial complexities due to its halted Russian project, its core operations in Cambodia continue to show resilience and promise, supported by strategic initiatives and a favorable market environment.
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