NagaCorps revenue hikes considerably in 2017 as its new casino complex woos more punters

In the preceding year NagaCorp, the largest hotel, gaming and leisure operator in Cambodia listed in the Stock Exchange of Hong Kong,  since 2006 saw its revenue hike considerably as the new phase of its casino-hotel complex based in the city of Phnom Penh wooed a significant number of VIP gamblers and Chinese tourists to its advantage.

Revenue at the company leapt 79.9% to $956.3 million last year, invigorated by a 142% revenue growth in VIP betting volumes. The Net profit soared  39% to $255.2 million.

As per the Company official’s perspective, NagaCorp is advancing as planned with the construction of a new casino hotel outside Vladivostok, Russia irrespective of the steep increase in gaming taxes there lately that could impact its investment returns.

Philip Lee, the Group’s Chief Financial Officer, said the Russian resort will start off its operation next year as per the schedule. In accordance with the statement of the company revealed in 2013, it had planned to invest at least $350 million in the project.

NagaCorp’s plans are contrary to those of Macau gaming tycoon, Lawrence Ho Yau-lung’s. Through two of his listed companies, the casino investor in December sold his entire stake worth $21.3 million in the developer of Tigre De Cristal — the only casino hotel now in operation in Vladivostok. His move came shortly after Russian parliament approved a bill that potentially doubles gaming taxes in its eastern Primorsky gaming zone.

“An office has been established in the city centre of Vladivostok, Russia,” the company said in its latest financial statement. “Certain key personnel have been appointed to monitor various aspects of the progress of the project which remains broadly on schedule for operation by 2019.”

Group management said it will “proactively” bring more Chinese tourists to its resorts and continue to explore the possibility of operating casinos in Japan.

“The opening of Naga2 in November last year significantly increases the quality and the range of VIP, mass gaming and the non-gaming offerings,” said Lee on Wednesday, referring to its second-phase casino complex in Cambodia, close to its first development called NagaWorld.

Naga2 features 903 hotel rooms and suites, some 300 gaming tables and 2,500 gambling machines. It also houses a 2,200-seat theatre.

The group’s VIP segment has seen much stronger growth than the mass market since Naga2’s opening. Revenue from VIP tables soared to $625.3 million last year from $225.7 million a year earlier while takings from public tables grew just 15.4% to $149.7 million.

NagaCorp, which contributed roughly 3% of Cambodia’s total gross domestic product in 2017, also counts on Chinese tourists for its growth. A total of 1.2 million Chinese visitors travelled to Cambodia last year, marking a 46% increase from 2016, according to the country’s tourism board. China surpassed Vietnam last year to become the largest source of tourists in Cambodia.

Chairman Timothy McNally, said: “We are optimistic those numbers of Chinese visitors would continue to increase.” To capture the Chinese outbound tourism boom, he said the group is considering expanding its current aircraft fleet to carry travellers from places without direct flights to Cambodia. “We’ll continue to be proactive and bring in more people from various mainland cities,” McNally said. It currently owns two Airbus aircraft and leases one.

He also reiterated that the group has a “keen interest” to operate casinos in Japan.

“As a gaming jurisdiction, Japan has wonderful potential,” McNally said, adding that management had visited various Japanese cities for discussions with local authorities. “Now we are just waiting for some additional information.”

At one point in Wednesday trade, the Hong Kong-listed shares of NagaCorp rose almost 10% to 7.17 Hong Kong dollars, its highest since 2014. But, it narrowed gains to closed 5.5% higher at HK$6.89 by the end of the day, while the benchmark Hang Seng index declined by 0.9% to close at 30,323.20.

Source: nikkei.com