Cambodian casino operator NagaCorp managed to make a decent profit in the first half of 2020, despite being forced to take a break from operations throughout the second quarter.
Data released on Thursday shows that the revenue of NagaCorp, registered in Hong Kong, for the six months ended June 30 was:
377.5 million US dollars, which is 57.6% less than in the same period last year,
operating profit fell almost 86% to $ 39.3 million,
profit after tax fell 91.6% to 20.6 million.
The Cambodian government has ordered all casinos to be closed from April 1 due to the spread of COVID-19. The shutdown lasted until early July, when NagaCorp began welcoming VIP players to its NagaWorld casino in Cambodia’s capital Phnom Penh, and the mass gambling market resumed later that month.
The prolonged shutdown led to a drop in VIP gambling turnover by more than 58%, while the percentage of VIP players ‘ winnings remained unchanged at 2.8%, resulting in VIP revenue also falling by 58% to $ 270.9 million.
NagaCorp stated that the results of the VIP sector would have been much worse if tour operators with fixed operations at the Naga 2 NagaWorld facility had not redirected high rollers during the closure of casinos in Macau, Malaysia and the Philippines due to the pandemic. Cambodia was one of the last countries in the Asia-Pacific region to close its doors to Chinese travelers. For a short time, NagaWorld remained the only real viable option.
The mass market gaming table market fell 54.4% in the first half of the year, while winnings increased 0.6 points to 9.3%, resulting in revenue from mass tables falling 53% to $ 68.4 million. Spending on electronic slot machines (EGM) fell 62.4%, while winnings rose 0.6 points to 9.3%, resulting in EGM revenue falling 57% to $ 32.7 million.
NagaWorld owns a casino monopoly in Phnom Penh that extends over a radius of 200 kilometers from the capital.A significant number of Chinese emigrants living in the city provided a small decline in the gaming segment of the mass market.
The pandemic has also negatively impacted non-gaming revenues, which have fallen from $ 19.2 million in the first half of 2019 to just 5.5 million this year.
As for NagaCorp’s ambitious plans to expand Naga 3, the company says that work is progressing, although a little slower than initially anticipated. The company still hopes to open Naga 3, which will expand the resort’s capacity to approximately 5,000 hotel rooms by 2025.
If we talk about the slow pace, the launch of the Naga Vladivostok project in the far East of Russia in the Primorye gaming zone seems to have been postponed again. The first phase was originally expected to open no later than 2018, but was later changed to 2019. On Thursday, the company said the project is still on track to launch by 2022.
Despite all these unfinished business, NagaCorp is considering further expansion plans at the local level, stating:
We intend to explore viable and profitable development of integrated resorts in the Siem Reap and Sihanoukville areas.
There are a lot of Chinese casinos in Sihanoukville, most of which are relatively small and mainly focused on online gambling. But many of these businesses closed after Cambodia banned online gambling. This may have convinced NagaCorp that a suitable resort would be able to occupy a convenient position in the area.