A spike in Chinese tourism to Cambodia over the first five months of 2017 has driven a strong six months through 30 June for NagaCorp, with revenue up 39% to US$401.6 million.
Gross gaming revenue at NagaCorp’s Phnom Penh property NagaWorld grew by 40% to US$386.8 million with EBITDA up 19% to US$181 million. Profit rose 20% to US$150.6 million
The results were powered by a huge 71% jump in VIP roll up to US$7.8 billion, although NagaWorld performed strongly in all segments with mass market table buy-ins increasing 23% to US$375.1 million and EGM bill-ins up 15% to US$853.1 million.
NagaCorp said a widespread boost in tourist arrivals, with China becoming the number one source of visitors this year, was largely behind NagaWorld’s growth.
“In the first five months of 2017, visitation to Cambodia continued to grow with international arrivals increasing by 13% to 2.3 million visitors and arrivals at Phnom Penh International Airport by 19% over the same period,” the company said in its interim results announcement.
“Visitation from China grew by 36% to 441,070 visitors, surpassing Vietnam to become the leading source of visitations to Cambodia. China (19%), Vietnam (15%) and Laos (8%) are the top three sources of arrivals and collectively accounted for 42% of total arrivals to Cambodia.
“Overall visitation growth continues to be the key driver of growth for the group.”
NagaCorp also pointed to a more stable operating environment ahead of the opening of Naga2 later this year as contributing to its strong results.
“Confidence in the operating environment leads to increasing economic activity, resulting in increasing numbers of investors and a growing expat population in Phnom Penh and driving footfall into NagaWorld,” it said, adding that “as a result of the completion of Naga2, the company’s balance sheet has strengthened.
“Shareholders’ funds increased to US$1.4 billion as at 30 June 2017 (31 December 2016: US$1.3 billion).
“In March 2017, the Group’s property assets were valued at US$5.4 billion by Colliers International (Hong Kong) Limited, while the group remains debt-free. As a consequence of the strengthening balance sheet, players are expressing more confidence, checking in more money, placing higher bets and generating a significant increase in business volume, especially in VIP rollings which increased by 71%.”
NagaCorp said it had resolved to declare an interim dividend for shareholders and a distribution for the holder of the convertible bonds of US$0.0208 per ordinary share, to be issued upon exercise of the conversion rights attached to the convertible bonds for the period.
The company is also planning to hold an extraordinary general meeting this month where shareholders will vote on CEO and controlling shareholder Chen Kip Leong’s decision to exercise conversion rights of his TSCLK Complex Convertible Bonds in the amount of US$275,000,000 and his NagaCity Walk Convertible Bonds in the amount of US$94,000,000.
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