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NAGACorp Reports First Half Year Profit despite Pandemic

Hong Kong-listed casino operator and developer NagaCorp Ltd reported on Thursday net profit of just above US$20.6 million for the first six months of the year, down 91.6 percent over the corresponding period last year.

That was on revenue that fell by 57.7 percent year-on-year, to US$377.5 million, said the company in a statement to the Hong Kong Stock Exchange.

The firm declared a dividend of US$0.029 a share – representing a payout ratio of 60 percent, based on the net profit generated for the period – to be paid on September 23.

The company runs the NagaWorld casino resort (pictured in a file photo) in Cambodia’s capital, Phnom Penh. It has an exclusive licence to operate casinos in Phnom Penh and its surroundings.

NagaCorp said its first-half results “were relatively stable, save for the impact from the temporary closure” of its casino operations during the entire second quarter this year as a countermeasure locally against Covid-19.

All casinos in Cambodia were ordered to shut down temporarily with effect from April 1, as part of a number of measures to prevent the further spread of the pandemic.

NagaCorp had been permitted to reopen its VIP gambling tables and slot machines operation on July 8, subject to applying Covid-19 countermeasures. The firm announced on July 19 it had also been allowed to reopen its mass-market gaming tables.

The firm said it has “recorded a steady increase in its gaming business volumes” since the reopening of its casino operations, “contributed by the patronage of mainly Chinese expatriates who have been currently living or conducting business activities in Cambodia.”

The company stated that the average daily volumes at all of its gaming segments were now above 90 percent of the average seen before the closure of the casino. VIP rolling chip turnover daily volume – post-closure period – was back to US$104.0 million, compared to just above US$106.5 million in first-quarter 2020, said NagaCorp.

Positive EBITDA

The company reported gross gaming revenue of US$372.0 million for the first six months of 2020, down 57.4 percent from a year earlier. The group had seen a 15-percent year-on-year increase in GGR in the opening quarter of this year.

NagaCorp said it was able to generate earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$88.7 million during the six months to June 30, despite its gaming business having only operated during three months of the reporting period.

As of June 30, the company said it had in aggregate cash and deposits of US$286 million. Taking into effect the company’s recent issuance of US$350-million senior notes, NagaCorp said its cash and deposits had increased to US$623 million as of July 7, 2020.

Thursday’s statement said the company expected to start in the second half this year preparation for the piling and foundation construction for its proposed Naga 3 expansion.

Naga 3, to be a mix of gaming and non-gaming, is expected to comprise of two 66-storey hotels, two 45-storey hotels, one 48-storey condominium hotel, one three-level basement and an 11-level multi-entertainment podium. The new addition to the NagaWorld Complex, Naga 3 will have a total cost of around US$3.52 billion.

The most recent results briefly mentioned NagaCorp’s investment in a casino resort in the Primorksy Krai region, near the eastern Russian city of Vladivostok.

“As at 30 June 2020, hotel tower topping off was completed and construction of casino podium was progressing up to level 2. Water and sewage system connected to the development site are expected to be completed by the third quarter of 2020,” said the company.

The first phase of the project includes a hotel, casino and a conference hall, and was said to be “broadly on track to commence operation by 2022.”