VIP gaming has taken over from mass as the primary revenue source for Cambodian integrated resort NagaWorld, with 65% of all revenue coming from VIP in 2017 compared to just 42% in the previous year.
The breakdown forms part of NagaWorld owner and operator NagaCorp’s 2017 annual report, released on Friday, which details the company’s 85% surge in revenue last year to US$956.3 million, up from US$531.6 million in 2016. While NagaWorld enjoyed increases across all gaming segments, VIP comfortably outpaced mass market with a 177% year-on-year increase to US$625.3 million.
As a result, while mass revenue climbed 9.2% in 2017 to US$300.6 million, its share of the revenue pie fell from 52% in 2016 to just 32% last year. Non-gaming revenue held stable at US$30.4 million.
Discussing the increased importance of VIP, aided by the opening of Naga2 in late October, NagaCorp Chairman Tim McNally said, “The VIP Market continues to register robust growth as a result of increasing market confidence in NagaWorld as an integrated gaming and entertainment destination.
“The competitive overseas junket incentive program introduced in March 2013 continues to enable the group to balance the increase in table limits while managing volatility and credit risk.
“The opening of Naga2 in November 2017, which significantly increased the variety, quality and quantity of NagaWorld’s gaming (VIP halls and suites and mass gaming halls) and non-gaming (karaoke, spas, clubs, restaurants, hotel rooms and suites) facilities, has enhanced the group’s ability to expand its business across the region as reflected in the growth in VIP rollings (up 142% to US$21.1 billion).”
McNally also provided an update on NagaCorp’s IR project in the Russian special economic zone of Vladivostok, which he said remains on track to open in 2019.
“We have now established an office at the city center of Vladivostok and certain key personnel have been appointed to monitor various aspects of the progress of the project,” he explained. “We believe our strategy to diversify our business geographically and expand into new casino markets will drive revenue growth in the long term.”
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NagaCorp also announced on Friday a number of board changes, stating that the company would “like to focus on the re-alignment and strengthening of its senior management in order to meet with the higher aspirations and further growth of the company.”
They include the promotion of Executive Director and CFO Philip Lee Wai Tuck to the role of Executive Deputy Chairman as of 15 March 2018. The 55-year-old will continue to oversee the overall financial and treasury affairs of NagaCorp as well as supporting and strengthening its strategic direction and oversight.
Philip Lee joined the group in 2009 and is a director of several of the NagaCorp’s wholly-owned subsidiaries, namely NagaCorp (HK) Limited, NAGAWORLD LIMITED, Naga Sports Limited, Naga Travel Limited, Naga Retail Limited, Naga Entertainment Limited, Naga Services Limited, Naga Media Limited, Naga Management Limited, NagaJet Management Limited, NagaWorld (Macau) Limitada, Naga Russia Limited, Naga Russia One Limited, Naga Hotels Russia Limited, Golden Passage Destinations Co Ltd, NagaWorld Three Limited, Ariston Sdn Bhd, Neptune Orient Sdn Bhd, Ariston (Cambodia) Limited and Naga Lease Limited. He also acts as the general director of Primorsky Entertainment Resorts City LLC.
Tan Sean Czoon has been appointed as Philip Lee’s replacement as CFO. The 39-year-old joined NagaCorp in 2013 and last held the position of Vice President of Business Development. Prior to that he was attached with the asset management division of Deutsche Bank (Hong Kong).
Retiring down from his position as an Executive Director is Chen Yepern due to other business commitments. Chen will be repositioned in the CEO Cabinet and designated as a Managing Director in the CEO Cabinet to support the executive functions of company founder and CEO, Tan Sri Dr Chen Lip Keong.
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