NagaCorp, the Hong Kong-listed entity behind the NagaWorld integrated resort in Phnom Penh, Cambodia, has released its financial results for the first half of 2024. The company saw its gross gaming revenue (GGR) rise to US$283.4 million, marking a robust 12.3% increase compared to the same period last year. This growth is primarily driven by the mass gaming segment.
Financial Performance Highlights
For the first six months of 2024, NagaCorp achieved a GGR of US$283.4 million, reflecting a notable 12.3% increase year-on-year. This rise underscores a significant recovery and demonstrates resilience in the Cambodian gaming and tourism sectors. The standout contributor to this growth has been the mass gaming segment, which saw a substantial 17.8% increase, reaching US$192.0 million.
Mass Gaming Segment Growth
The mass gaming segment has been a key driver of NagaCorp’s recent financial performance. Average daily business volumes in this segment increased by 5.7% year-on-year, climbing from US$10.0 million to US$10.5 million. This performance represents a recovery to 87.2% of pre-pandemic levels.
VIP Gaming Performance
The VIP gaming segment showed more modest growth compared to the mass gaming segment. Overall, the VIP segment grew by 2.3%. Within this category, NagaCorp differentiates between Premium VIP and Referral VIP:
Premium VIP
This sub-segment experienced an 11.6% increase in average rolling per player year-on-year, reaching 82.6% of pre-pandemic levels. This improvement is attributed to the return of business travelers and the successful conversion of Referral VIP players into direct Premium VIP clients.
Referral VIP
Revenue from this segment grew by 17.6%, supported by an improved win rate of 3.8%. Despite a softer performance in rolling figures, average daily rolling saw a notable 33.3% quarter-on-quarter increase, reaching US$5.1 million. This growth benefits from the gradual return of both leisure and business travelers.
Nevertheless, the Referral VIP segment remains relatively small. When combined with the mass gaming and Premium VIP segments, these areas accounted for 89.0% of H1 2024 GGR and an even more significant 93.4% of profit.
Impact of Financial Impairment
Despite the strong GGR growth, NagaCorp faced challenges in the form of financial losses. The company reported a US$1.0 million loss for the quarter, largely due to a non-cash impairment charge of US$89.1 million related to its stalled integrated resort development in Russia. This impairment significantly impacted the company’s EBITDA, which dropped to US$55.5 million from US$143.2 million in the same period last year.
Strategic Outlook and Future Projects
NagaCorp remains optimistic about the Cambodian market’s recovery trajectory. The company is confident that the ongoing economic stability and political environment in Cambodia will support continued growth in the tourism sector. The return of international travel is expected to further enhance this growth.
A key component of NagaCorp’s future strategy is the development of Naga 3, a new integrated resort project. This initiative aims to strengthen Cambodia’s tourism landscape and align with the Royal Government of Cambodia’s vision to boost the sector. Naga 3 is expected to position NagaWorld as a leading destination in Phnom Penh, attracting more visitors with its luxurious offerings and competitive value.
NagaCorp’s performance for the first half of 2024 highlights both resilience and growth. The company has demonstrated strong results in its mass and Premium VIP gaming segments, despite facing financial challenges related to an impairment loss. With a positive outlook for the Cambodian market and strategic initiatives like Naga 3, NagaCorp is well-positioned for continued success and growth in the coming years.