The NagaWorld casino in the Cambodian capital Phnom Penh has announced that gross gaming revenue (GGR) rose 48% year on year in the first quarter of 2015, largely on the back of increased VIP revenue.
Nagacorp, the Hong Kong-listed operator of NagaWorld, said that gross gaming revenue rose to US$113.5 million in Q1 2015 from $76.9 million in the corresponding period last year.
Revenues for the mass market, made up largely of Southeast Asian clients, grew only 8% to $47.9 million, while earnings from VIP clients soared 101% to $65.5 million.
In last year’s first quarter, mass market earnings stood at $44.3 million, $11.7 million above VIP revenues.
However, gaming analyst Michael Ting of CIMB said while comparing the two quarters showed a large increase, a deeper look showed mixed results.
“Last quarter last year [NagaWorld’s] VIP segment hadn’t seen much traction yet,” Mr Ting said. “If you look at overall GGR, it’s only up 4% from [the most recent quarter].”
According to Mr Ting, investors “seem to be pleased” at the latest filing from Nagacorp, but regional competition to attract Chinese junkets, who are demanding ever-higher commissions to bring in clients, could cut into profits.
“From a share price perspective, margins are a major concern,” Mr Ting said.
In February, Nagacorp announced its 2014 revenue had risen 17% to $381.4 million, although net profit was down 3%.
“The relatively lower net profit growth compared to GGR growth is a result of higher incentives given to junket operators to promote NagaWorld to the rest of Asia (including China) as well as higher staff costs to improve service quality and staff retention,” the company said in a statement.
However, the company remains optimistic its efforts will bring desired results, saying it will “bear fruit in the coming years as NagaWorld grows its market share in Asia.”
