NagaCorp, which owns NagaWorld in the Mekong Region of Cambodia, saw its GGR increase by 26 per cent to US$480.6m in 2015 with profits up by 27 per cent.
Mass Market Revenue increased by 33 per cent to US$257.7m whilst VIP Revenue increased by 19 per cent to US$222.9m.
The company’s results were boosted by an increase in Chinese visitation to Cambodia which was up 24 per cent year-on-year to 0.6m visitors during the first 11 months of 2015.
NagaCorp stated: “The continued downturn in Macau’s gaming sector offers opportunities for the group to further penetrate the regional gaming market for both the VIP and Mass Markets. Taking advantage of NagaWorld’s low-cost structure, the group is able to offer better commercial terms to junket operators and agents. Several North Asian junkets seeking to diversify their operations to other parts of Asia signed up with the Group during the year. NagaWorld’s junket incentive program, aimed at promoting NagaWorld to a wider range of regional operators and players, continues to be successful, with a 27 per cent increase in VIP rollings during the year. For 2016, the group has revised its overseas junket incentive program in order to improve its margins, as it captures a larger share of the Asian VIP gaming market.”
As one of the main tourist destinations in Phnom Penh, NagaWorld is poised to benefit from continued international visitor growth. In an effort to improve accessibility and promote Phnom Penh and Cambodia as a tourist destination, NagaWorld collaborated with Chinese outbound travel agents and an independent airline operator to bring Chinese tourists into the country. Weekly scheduled direct flights commenced from the Chinese cities of Changsha and Xian to Cambodia in January 2016, and are expected to extend to other cities over time.
The Cambodian economy continued to register stable growth in 2015 with the International Monetary Fund projecting real Gross Domestic Product to increase by seven per cent and 7.2 per cent.
International tourist arrivals to Cambodia, one of the Group’s business growth drivers, increased five per cent to 4.2m visitors in the first 11 months of 2015, compared with the same period in 2014.
NagaWorld’s net profit increased by 27 per cent to US$172.6m. At the end of the year, NagaWorld had in place 287 gaming tables and 1,656 Electronic Gaming Machines. Mass Market achieved solid growth with an 18 per cent increase in Public Floor Tables buyins and 16 per cent increase in EGM bills-in.
NagaCorp stated: “The business volume growth is attributable to the steady increase in visitors to the property, as well as the success in executing operational efficiencies through the implementation of table buy-ins for all Public Floor Tables, and “ticket-in, ticket-out” system for the majority of EGM in the second half of 2015. The operational improvements on both fronts have boosted convenience for players during their games, which led to incremental growth in business volumes. VIP rollings increased by 27 per cent to US$7.9bn for 2015. The Group signed additional North Asian junkets in the second quarter of 2015 and launched tele-betting with an overseas junket operator in December 2015.”
The proposed opening of the NagaCity Walk with its retail mall in the third quarter of 2016 is expected to enhance NagaWorld’s appeal to both the Mass and VIP Markets. With China Duty Free Group as the anchor tenant, the retail mall is expected to draw more tourist traffic from China to NagaWorld, which will further strengthen NagaWorld’s position as a leading integrated gaming and entertainment destination in the Mekong Region.
Additionally, NagaCorp’s investment in the gaming and resort development project in Vladivostok, Russia, remains broadly on schedule for operation by 2018, with a Ground Breaking ceremony held on 22 May 2015. An office has been established and key personnel have already been appointed to monitor various aspects of the project’s progress. Physical site works and construction are expected to commence around April 2016. The Group believes that its strategy to diversify its business geographically and expand into new casino markets will drive revenue growth in the long term.