Logo of Phnom Penh Post newspaper Phnom Penh Post - NagaCorp still on a roll, but at slower pace: Citi

NagaCorp still on a roll, but at slower pace: Citi

People walk past NagaWorld casino in Phnom Penh in 2014.
People walk past NagaWorld casino in Phnom Penh in 2014. Eli Meixler

NagaCorp still on a roll, but at slower pace: Citi

Nagacorp Ltd, operator of the NagaWorld casino and hotel complex in Phnom Penh, exhibited strong revenue growth in the first quarter of the year and is expected to maintain this course through the end of the year, though at a slower pace, Citi Research said in its latest investor note on the Hong Kong-listed firm.

Citi analysts noted that NagaCorp’s reported gross gaming revenue (GGR) grew 35 per cent year-on-year in the first quarter of 2016 to $153.8 million, benefitting from strong growth in both the VIP and mass market.

“[We] expect solid GGR growth in 2016,” they said in the note, adding that 2016 would likely continue to be a “growth year” for NagaWorld.

The Cambodian casino’s VIP rollings increased by 65 per cent year-on-year in the first quarter of 2016.

NagaWorld’s “Macau-based junkets should continue to fuel VIP GGR growth, albeit at a much lower rate” than in 2015, Citi analysts said, projecting 15 per cent VIP GGR growth in 2016, compared with 27 per cent last year.

Lorien Pilling, director of Global Betting and Gaming Consultants (GBGC), said NagaCorp has benefitted from the willingness of junket operators to divert players from major-league casinos in Macau to NagaWorld in Phnom Penh.

However, the group recently reduced its incentives to junket operators in an effort to boost its VIP profit margin.“The gambling margins from VIP junket play tend to be low… but the costs of servicing them can be high,” he explained.

“So the casino has to balance the costs of servicing the high-end players and the revenues they bring.”

According to NagaCorp’s 2015 annual report, about 70 per cent of the company’s $175.8 million cost of sales went to covering the tab of its five largest junket operators, which collectively brought in just under a third of the company’s $503.6 million revenue.

Citi analysts also estimated a slowdown in NagaWorld’s mass market GGR growth.

“We assume growth [will] slow to circa 12 per cent (from 18 per cent last year), reflecting the moderating visitation growth,” they said in the research note.

NagaWorld, the only casino licensed to operate in Phnom Penh, had 287 gaming tables and 1,656 electronic gaming machines (EGMs) in place at the end of 2015. The company posted $172.6 million net profit in 2015.

MOST VIEWED

  • Wing Bank opens new branch in front of Orkide The Royal along Street 2004

    Wing Bank celebrates first anniversary as commercial bank with launch of brand-new branch. One year since officially launching with a commercial banking licence, Wing Bank on March 14 launched a new branch in front of Orkide The Royal along Street 2004. The launch was presided over by

  • Girl from Stung Meanchey dump now college grad living in Australia

    After finishing her foundational studies at Trinity College and earning a Bachelor’s degree from the University of Melbourne in 2022, Ron Sophy, a girl who once lived at the Stung Meanchey garbage dump and scavenged for things to sell, is now working at a private

  • Ministry using ChatGPT AI to ‘ease workload’; Khmer version planned

    The Digital Government Committee is planning to make a Khmer language version of popular artificial intelligence (AI) technology ChatGPT available to the public in the near future, following extensive testing. On March 9, the Ministry of Post and Telecommunications revealed that it has been using the

  • Wat Phnom hornbills attract tourists, locals

    Thanks to the arrival of a friendly flock of great hornbills, Hour Rithy, a former aviculturist – or raiser of birds – in Kratie province turned Phnom Penh tuk tuk driver, has seen a partial return to his former profession. He has become something of a guide

  • PM urges end to ‘baseless’ international Ream base accusations

    Prime Minister Hun Sen urges an end to “baseless” foreign accusations surrounding the development of the Kingdom’s Ream Naval Base, as the US has consistently suggested that the base is being expanded to accommodate a Chinese military presence. Hun Sen renewed his calls while

  • Almost 9K tourists see equinox sunrise at Angkor Wat

    Nearly 9,000 visitors – including 2,226 international tourists – gathered at Angkor Wat on March 21 to view the spring equinox sunrise, according to a senior official of the Siem Reap provinical tourism department. Ngov Seng Kak, director of the department, said a total of 8,726 people visited Angkor Wat to