Cambodian casino operator NagaCorp managed to turn a tidy profit in the first half of 2020 despite being forced to close for the entire second quarter.
Figures released Thursday show the Hong Kong-listed NagaCorp generated revenue of US$377.5m in the six months ending June 30, a 57.6% decline from the same period last year. Operating profit tumbled nearly 86% to $39.3m while after-tax profits plunged 91.6% to $20.6m.
Cambodia’s government ordered all casinos to shut as of April 1 due to the spread of COVID-19. The shutdown lasted until early July, when NagaCorp began welcoming VIP gamblers back to its NagaWorld casino in Cambodia’s capital Phnom Penh, and mass market gambling resumed later that month.
The lengthy shutdown resulted in VIP gambling turnover falling by more than 58% while the VIP win rate was unchanged at 2.8%, resulting in VIP revenue also falling 58% to $270.9m.
NagaCorp said the VIP results would have been much worse were it not for junket operators with fixed operations in NagaWorld’s Naga 2 facility redirecting high-rollers during pandemic-related casino closures in Macau, Malaysia and the Philippines. Cambodia was among the last Asia-Pacific countries to bar Chinese travelers, which left NagaWorld the only real viable option for a brief period.
Mass market gaming table drop fell 54.4% in H1 while win nudged up 0.6 points to 9.3%, pushing mass table revenue down 53% to $68.4m. Electronic gaming machine (EGM) spending dropped 62.4% while win rose 0.6 points to 9.3%, leaving EGM revenue down 57% to $32.7m.
NagaWorld holds a Phnom Penh casino monopoly that extends to a 200km radius of the capital, and the significant number of Chinese ex-pats who reside in the city ensured the mass market gaming segment’s decline wasn’t worse.
The pandemic also negatively impacted non-gaming revenue, which fell from $19.2m in H1 2019 to just $5.5m this year.
As for NagaCorp’s ambitious Naga 3 expansion plans, the company says the work is moving forward, albeit a little slower than originally anticipated. The company still hopes to open Naga 3, which will expand the resort’s capacity to around 5k hotel rooms, by 2025.
Speaking of slow, the Naga Vladivostok project in Russia’s far east Primorye gaming zone appears to have delayed its launch yet again. Originally touted as opening its first phase “not later than 2018,” that was later changed to 2019, than to 2020. On Thursday, the company said the project “remains broadly on track to commence operation by 2022.”
Despite all this unfinished business, NagaCorp is mulling further expansion plans on a local level, saying it intends to “explore viable and profitable [integrated resort] development in Siem Reap and Sihanoukville areas.”
Sihanoukville is overrun with Chinese-run casinos, most of them relatively small and primarily focused on online gambling operations. But many of these operations closed shop after Cambodia banned online gambling, which may have convinced NagaCorp that a proper resort would be able to stake out a comfortable position in the area.