Earnings not impacted by lack of Chinese tourists: NagaCorp’s Lee

Philip Lee

Philip Lee, executive deputy chairman of NagaCorp says the lack of Chinese outbound visitors has not had a significant impact on NagaWorld’s revenue.

“Our business is quite unique in the industry. We are not that reliant on visitation from China as our market really comprises a very strong domestic market, and that comprises of foreign residents [living in Cambodia], and expats, he said, speaking on Bloomberg Daybreak: Asia. 

These foreign residents and expats coming from Mainland China, Malaysia, Singapore, and the rest of Asia, he said. 

When asked how the crackdown on junkets in Macau could impact the industry, Lee said they viewed the changes as a positive for the industry as it would take away the middle-man and allow operators to directly target VIP customers.

That being said, Lee admitted that operators will need to be careful about the implications on credit, credit risk, and KYC obligations. 

NagaWorld had terminated its agreements with junket operator Suncity in March 2021, well before the crackdown on junkets in December 2021. 

“We’ll see how it plays out,” said Lee, referring to the challenges facing junket and VIP business. 

“Right now there are still significant travel restrictions and once travel restrictions ease, we will see how that segment of business recovers.” 

When asked about expansion plans and whether NagaCorp may look to put in a bid for a Macau gaming concession, Lee confirmed that the company is not planning to enter Macau. 

“That might be too big for us to bite. We’ve looked very carefully at where we can expand our business… We find that we actually see Cambodia as the gold mine. We’re very happy to be there and very happy that the government has handled the covid situation and we expect the recovery for the tourism industry will pick up to pre-Covid levels pretty soon.”

Earlier this week, NagaCorp posted a loss for 2021 due to the impact of Covid closures but said it had seen a strong rebound in volumes following NagaWorld’s reopening in September.

The group swung to a loss attributable to owners of the company of $147 million, compared with a profit on that basis of $102.3 million the year earlier. Revenue plummeted 74 percent to $225.8 million, it said in a filing with the Hong Kong Stock Exchange.