Cambodian integrated resort, NagaWorld, has seen its gross gaming revenue soar by a massive 181% to US$243.2 million in the three months to 31 March 2018, buoyed by the launch of Naga2 late last year which has seen a surge in both VIP and mass play.
Releasing its unaudited financial results for the period, NagaCorp reported a 51% increase in VIP rolling chip volume to US$5.64 billion – up from US$3.73 billion 12 months earlier – while mass table drop increased 56% to US$263.8 million. EGM bill-ins grew 24% to US$515.4 million.
Discussing the results, NagaCorp said that its VIP business in particular had benefited from an uptick in volume at both properties, “being more pronounced in Naga2, where customers demand for more tables and higher table limits.”
The company also pointed to the arrival of Macau’s leading junket operator, Suncity, in March as having made a notable difference.
“Suncity has signed an Incentive Agreement with the group, setting up a fixed base business operation with full-fledged office facilities, commencing business on 1 March 2018 and contributing in increased number of players and rolling. An increased number of South East Asian players, noticeably from Thailand, have also been observed in addition to the traditional large number of Malaysian and other customers from the regions,” NagaCorp said.
Union Gaming’s Head of Equity Research, Grant Govertsen, added that the improvement in NagaWorld’s mass segment was a strong sign moving forward with the 56% growth comfortably exceeding expectations of around 32%.
“Importantly, this suggests that not only is NagaWorld not feeling any cannibalization but that Naga2 is under-supplied in terms of mass tables,” Govertsen said. “We believe the company is already in the process of adding more mass tables to Naga2.
“This is cause for us to raise our mass expectations for the year, and we are now forecasting 47% mass volume growth this year and 18% next (previously +29% and +14%, respectively).”
NagaCorp said that international visitation to Cambodia had increased by 12% year-on-year in January 2018 to 596,241 including a 91% increase in visitation from mainland China to 153,207.
“As a result, the average daily foot traffic of the overall property has increased significantly and has helped the mass market business,” the company said.
“It is observed that the month of March 2018 has seen a noticeable increase of visitors compared to January 2018 and this has put significant pressure on the planned limited supply of number of mass market tables.”
Hotel room nights sold increased by 56.2% from 51,386 in 1Q17 to 80,244 in 1Q18.
