Cambodian gaming operator NagaCorp has indicated that it’s expecting to record either a loss of some $6.9 million or a profit of $3.1 million for the six month period ended June 30th.
According to a Monday filing with the Hong Kong Stock Exchange, the wide variance in possible profit or loss comes down to the ‘preliminary findings from the independent revaluation of the Group’s gaming and resort project in Vladivostok, Russia’.
The group notes that the independent firm engaged to carry out the evaluation indicated the group should expect an impairment ‘of approximately $85 million to $95 million […] whereas no such impairment was recorded for the previous financial periods’.
This was also ‘due to an increase in the discount rate used for the purpose of determining the project present value and the lower business volume expected to be generated from the Vladivostok Project’.
Back in March of 2022, NagaCorp announced it was suspending its Vladivostok project ‘indefinitely’ as it was ‘surrounded by various uncertainties’.
The group opted to invoke a ‘force majeure’ clause in its investment agreement in the best interests of group and its shareholders.
This announcement came just a week after Russia’s invasion of Ukraine and subsequent sanctions leveled on Moscow.
The March 2022 statement did not explicitly mention the war.
The first phase of the project was envisioned to be an 11-storey four-star hotel with 279 rooms, a casino and a multipurpose concert hall with 2,000 seats. The first construction stage was planned to occupy an area of almost 55,000 square meters.
The total planned complex was to occupy some 302,000 square meters and include 2,719 rooms, as well as a water park.
The Naga project was one of multiple investments scheduled for the Primorye zone, which was seen as the most promising of Russia’s designated gambling hubs due to its proximity to Northern Asia.
Hong Kong-listed Summit Ascent, a unit of former Suncity Group Holdings (now LET Group), was the first to open there with its Tigre de Cristal making its debut in 2015. That was followed Shambala, backed by a Russian businessman, in May 2020.
