irasia.com – NagaCorp Ltd.
Naga Corp Ltd.
(Incorporated in the Cayman Islands with limited liability)
* * * * *
Gross gaming revenue (GGR) of US$237.4 million
EBITDA of US$130.1 million
Net profit of US$52.7 million
60% interim dividend payout ratio
Hong Kong, July 18, 2022 – Naga Corp Ltd. (“Naga Corp.“or the”Company“, stock code SEHK: 3918), and its subsidiaries (collectively, the “Band“) which owns, manages and operates NagaWorld, the entertainment hub of the Mekong region, today announced its financial and operating results for the six months ended June 30, 2022 (the “Period” Where “1H2022“).
1) Gross Gaming Revenue (“GGR”) $237.4 million
2) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $130.1 million.
3) Net profit $52.7 million
4) GGR Mass Market Tables $103.3 million
5) GGR Electronic Consumer Gaming (“EGM”) Machines $55.5 million
6) Mass market premium GGR $61.3 million
7) GGR Referral VIP Marketplace $17.2 million
The financial results of NagaCorp Ltd. for the six months ended June 30, 2022 reflect satisfactory sequential quarterly growth for the main financial indicators. Given the Group’s deep and resilient market, with a strong focus on the captive domestic market, the Company remained profitable during the peak period of COVID-19 during the fiscal year ended December 31, 2020 (“FY2020” ) through 1H2022 and is one of the few integrated resorts in the Asia-Pacific region to report a cumulative positive net profit for the said period. During the Period, the Group recorded an EBITDA of US$130.1 million and a net profit of US$52.7 million. Group net profit increased sequentially quarter over quarter (“QoQ”) by 39.4% driven by higher mass market and premium mass market revenue with stable costs. Net gaming revenue (“NGR”) and gross profit increased by 9.2% and 10.0%, respectively, compared to the three months ended March 31, 2022 (“1Q2022”). Despite the increase in business volumes, the Company’s administrative and other operating expenses remained stable, resulting in higher profitability margins. EBITDA also increased sequentially by 13.2% quarter-on-quarter. Considering the financial results of the Company for 1H2022, the Board recommends the payment of an interim dividend of 0.73 US cents per share (or the equivalent of 5.66 HK cents per share) for the Period in the form shares, representing a dividend payout ratio of approximately 60% based on the net profit generated for the Period.
During the period, the company continued to deliver quarterly sequential business recovery growth for 2Q2022 versus 1Q2022 across all business segments, particularly in mass market, premium mass and Reference VIP. Average daily business volumes for the Mass Market and Premium Mass segments increased 15.9% and 14.5% quarter-on-quarter to US$9.69 million and US$8.63 million, respectively, in 2Q2022. This demonstrates the depth, strength and resilience of the captive domestic market during the peak phase of the pandemic as well as its strong recovery during the current initial phase of global pandemic recovery. Referral VIP business volumes also improved significantly, with average daily turnover increasing 98.5% on a sequential basis to US$3.91 million in 2Q2022, the number of international direct flights to Phnom Penh continuing to recover. Average daily business volumes for the Mass Market and Premium Mass segments in 2Q2022 have already recovered by 80.3% and 71.8%, respectively, compared to fiscal year 2019 (pre-COVID-19 year peak) . Average daily business volumes for the Mass Market and Premium Mass segments in 2Q2022 also reached the highest levels since the first quarter of 2020.
The Group’s cash and deposits further increased from US$125.1 million as of December 31, 2021 to US$212.9 million as of June 30, 2022. These increases are the result of the continued recovery in business volumes and prudent cash management.
The widespread effects of COVID-19 have brought unprecedented challenges and uncertainties to the global market. However, extensive vaccination coverage against COVID-19 has enabled Cambodia to reopen borders for all socio-economic activities and tourism, resulting in a positive economic outlook in 2022 and 2023. According to the Ministry of Economy and Finance , Cambodia’s economic growth is expected to reach 5.6% in 2022, supported by impressively high vaccination rates that rank among the best in the world. At the national level, the country is progressing towards strong herd immunity against COVID-19 variants, which has enabled the government to fully restore socio-economic activities (Source: Khmer Times, March 8, 2022). Cambodia’s Ministry of Tourism (“MOT”) aims to receive at least 1 million foreign tourists in 2022, with tourists arriving mainly from ASEAN, the United States, France and the United Kingdom. Based on this trend, Cambodia will see at least 7 million foreign tourist arrivals by the end of 2025 (Source: Khmer Times, May 20, 2022). Meanwhile, the government is focusing on managing the COVID-19 endemic and preparing health systems for possible future pandemics.
The Regional Comprehensive Economic Partnership (“RCEP”), in addition to Cambodia’s existing bilateral Free Trade Agreement (“FTA”), is the key factor encouraging more foreign investors, especially from China to Cambodia, bringing long-term benefits to Cambodia (Source: Asia Development Outlook, April 2022). In addition, the strong friendship and bilateral cooperation with China under the Belt and Road Initiative are the main drivers for the growth of trade and investment between the two countries. Cambodia is expected to attract additional new FDI after the Free Trade Agreement between Cambodia and China. Additionally, the Cambodia-ROK Free Trade Agreement and RCEP all entered into force in 2022 (Source: Khmer Times, May 26, 2022). The government is working to restore the Cambodian economy and continue its upward trajectory after the pandemic.
Despite the challenges posed by the pandemic and heightened uncertainties following geopolitical tensions, bilateral trade between Cambodia and China continued to increase and remain strong, reaching US$6.0 billion in the first half of 2022, a increase of 19.7% compared to the same period last year. . Total imports from China were valued at US$5.4 billion in the first half of 2022, representing a 24.2% year-over-year increase (Source: Khmer Times, July 13, 2022). The increase in the volume of trade between Cambodia and China has been mainly attributed to the effectiveness of the RCEP and the FTA, better trade facilitation, as well as the close ties and geographical proximity between the two country.
The Group continues to focus on the execution of its existing development projects. Development of Naga 3 is ongoing. It is expected that the combined NagaWorld complex (Naga 1, Naga 2 and Naga 3) will have approximately 5,000 hotel rooms, 1,300 gaming tables and 4,500 EGMs and many other non-gaming attractions. Approximately 93% of Naga 3’s gross floor area will include non-gaming offerings, which is in line with the Group’s long-term strategy to offer comprehensive lifestyle-focused products and services. The long-term strategy of Naga 3 is the continuation of the success of Naga 2. The company is committed to developing and completing the Naga 3 project to boost and improve Cambodia’s tourism industry. Given the uniqueness of its casino monopoly in the heart of a capital city, the combined NagaWorld resort is expected to position the Group as one of the premier integrated riverside resort and entertainment centers in the Asia-Pacific region.
For more information, please visit https://doc.irasia.com/listco/hk/nagacorp/interim/2022/intpress.pdf.
Source: NagaCorp Ltd.
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