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Cambodia – NagaWorld back up to 95 per cent of pre-pandemic mass revenue

By - 8 March 2021

Since the re-opening of the casino businesses on July 8 2020, NagaCorp recorded an initial recovery rate, compared to the pre-closure period of 1Q2020, of about 95 per cent for the Mass Market Segment and about 69 per cent for the VIP Market Segment.

The satisfactory recovery of the gaming business volumes and revenues was largely contributed by a reasonably sized expatriate community and to some extent, visitors from East Asia (mainly from China, South Korea and Taiwan) patronising NagaWorld in search of entertainment. With its attractive and quality facilities and located strategically in the city-centre, NagaWorld has since its inception been the focal point of leisure and entertainment activities in Phnom Penh. Hence, despite the prolonged regional travel restrictions and reduction in most international flights, the Group’s Mass Market segment has been quite steady.

As a result of the re-opening and business volume recovery, 2H2020 EBITDA and net profit increased sequentially by about 99 per cent and about 297 per cent respectively, compared to 1H2020. The Group generated GGR, EBITDA and net profit of US$869.6m, US$265.2m and US$102.3m, respectively, for the financial year ended December 31, 2020.

Cambodia ranks No. 1 in Asia and No. 3 in the world, out of 166 countries, with the best effective measures to contain the spread of COVID-19 and to handle pandemic’s fallout

Since its inception, the group believes that investing and emphasizing on the mass market is the foundation of a steady source of revenue which generates higher margin as reflected and proven on the published yearly results.

In 4Q2020, the Mass Market Tables’ average daily buy-ins increased by about 23% sequentially to US$3.91m compared to 3Q2020. Furthermore, Mass Market Tables’ average daily table buyins recorded in 4Q2020 has exceeded the corresponding average daily volume recorded in 1Q2020 (prior to the temporary closure of casino operations). The overall steady recovery of Mass Market

Tables was mainly supported by stable growth in the premium mass segment, which contributed about 37 per cent of Mass Market Tables GGR recorded in 2H2020 (compared with 1Q2020 Mass Market Tables GGR is 30 per cent). At the end of December 2020, the company had cash and deposits of US$452m.

Analysts do not believe the current closure, following 11 members of staff testing positive for coronavirus, to impact the business too much.

Union Gaming analyst John DeCree said: “While the length of the closure is uncertain, we do not expect it to be anything like the multi-month closure in 2020,” said DeCree, pointing to NagaWorld’s’ three-month closure stretching from April to June of last year. The quarantine period in Cambodia is two weeks, but we suspect it could take a little longer to reopen out of an abundance of caution.

“Like the previous reopening, we suspect pent-up demand will return quickly when operations resume. Looking ahead, Cambodia received nearly 1 million vaccines so far, which should go a long way in combating the pandemic and helping to open up some international travel,” he added.

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