Nagacorp net up 36%; mass lifts margins

NagaWorld Cambodia
NagaWorld Cambodia

Nagacorp posted a 36 percent jump in net profit in the six months to end June, with strong growth in the mass market helping to boost profit margins.

Net profit came in at $245.1 million, while total gross gaming revenue rose 22 percent to $872.4 million. The operator of the NagaWorld IR in Phnom Penh reported revenue growth across all areas of its business. 

Mass market table buy-ins increased by 32 percent to $756.3 million, while VIP rollings increased by 38 percent to $23.2 billion, the company said in a statement to the Hong Kong Stock Exchange, where it is listed.

The net profit margin rose to 28 percent from 25 percent in the same period the prior year due to the increase in contribution from the mass market segment, which has a gross profit margin of 98 percent compared with just 27 percent in VIP.  Mass market players made up 54 percent of the total during the period. 

Nagacorp said the strong performance was due to an increase in tourism to Cambodia, a more stable political climate following recent elections and growing foreign direct investment into the country.

The U.S./China trade war, which has hit the Mainland China economy, is helping Cambodia as many Chinese factories are relocating to the Kingdom. During the first 5 months of 2019, international business-related travel into Cambodia increased by 148 percent to 567,357 visitors. 

International arrivals increased 11 percent to 2.9 million visitors in the first five months of the year, with China the leading source of visitation growing by 40 percent to 1.1 million visitors.

During the Period, two junket operators commenced fixed base operations at Naga 2, contributing to the increase in the number of higher end VIP players from the region and rollings. VIP revenue rose 18 percent to $649.9 million. 

The company recently announced a $3.4 billion expansion of the property to be known as Naga 3. The third phase of development will be 90 percent non-gaming and will include family friendly activities, such as a three-storey digital theme park.