Phnom Penh's only licensed casino sees drop in revenues as VIP customer spending plummets despite slot machine gains
NAGAWORLD'S first-half profits fell 55 percent year-on-year as falling income from high-rolling gamblers dwarfed a more than 1,000 percent gain in income from slot machines, the owner of the casino and hotel operator said in a statement to the Hong Kong Stock Exchange.
First-half profits after tax fell to US$11.5 million, or $0.006 per share, in the six months to the end of June, down from $25.5 million, or US$0.012 a share last year as casino revenues slumped 41.7 percent to $63.6 million from $109.1 million, Saturday's statement said.
The decline came despite a 55 percent year-on-year decrease in costs to $28.7 million from reduced commissions and subsidies on rooms, food and beverages, and air tickets.
NagaWorld divides its casino operations into a public gaming floor, a junket VIP gaming floor and slot machines.
Revenues from the tables on the junket VIP floor, which accounted for 94.2 percent of total gaming revenues in the first half of last year, plummeted 66.8 percent to US$34.1 from $102.8 million in the six months, the statement showed.
NagaWorld Chief Operating Officer Steve Cheng could not be reached for comment Monday, but NagaCorp attributed the loss to the "global financial tsunami".
Its figures showed the number of junket VIP visitors remained stable - around 7,274 in the first six months of 2009, only slightly down on 7,960 a year earlier - but average spending plummeted.
Each VIP visitor bought just $24,500 worth of chips on average in the first half of the year, down from $66,200 a year earlier, and the total amount bet on the tables dropped 62.5 percent from around $4 billion to $1.5 billion for the six months ended 30 June 2009.
But NagaWorld was a big winner from Prime Minister Hun Sen's February decision to close slot machine outlets and sports betting in all venues aside from licensed casinos.
"The closure of many outlets and parlours that offered slot machines has reduced supply of venues offering such gaming activity in Phnom Penh," the company said in the statement. "This has benefitted NagaWorld as it is the only licensed casino in and round Phnom Penh allowed to operate gaming activities including the offering of slot machines."
The company operated 525 slot stations during the first six months of the year, up from just 200 in 2006, earning $16.9 million in revenues, up 1,026.7 percent from $1.5 million in the first six months of 2008. The casino has since increased the number of slot machines to 749 as of the start of September and is aiming to eventually house 1,000 machines, it said.
Revenues from the 65 gaming tables on the public gaming floor were also up, climbing 121.7 percent from $4.6 million a year earlier to $10.2 million.
NagaWorld also increased its non-gaming revenues with the completion of its hotel and entertainment facilities. Revenue from its 508 hotel rooms, 11 food and beverage outlets, karaoke rooms, spa and convention facilities grew 1,050 percent from just $200,000 in the first half of 2008 to $2.3 million.
It is due Wednesday to open a club lounge, swimming pool and health club.