NagaCorp Sees 2009 Gaming Profits Sink

Net profit at NagaCorp, Cambodia’s largest entertainment gaming company, decreased by 36.3 percent to $25.5 million in 2009, though growth in revenue from gaming machines and floor tables helped to cushion the fall, the company announced yesterday in its end-of-year earnings report.

Total revenue at the company fell by 39.1 percent to $117.8 million while revenue from organized trips of VIP gamblers-known as junkets-fell a whopping 70 percent to $53.4 million.

Revenues from gaming machine stations, however, increased tenfold to $34.3 million. Public floor tables also saw a marked rise of 151.3 percent to $24.6 million.

“The sustained tourism arrivals and stable political environment have enabled the Group to penetrate further into the mass gaming market…which yields higher margins than the junket VIP market,” the company announced in a statement yesterday.

The number of gaming machines at NagaWorld Casino, NagaCorp’s wholly owned subsidiary, grew sharply from 211 at the end of 2008 to 618 in 2009.

Company officials could not be reached yesterday for comment on the earnings decline but said in a media statement that the “global financial tsunami seems to have impacted NagaWorld and Cambodia to a lesser degree.”

Revenue derived from non-junket business contributed to 54.7 percent of total revenue, compared to only 7.9 percent in 2008. Gambling on the public floor increased from $129.1 million in 2008 to $150.0 million in 2009, while win rates rose to 16.3 percent form 7.6 percent the previous year.

Mey Vann, director of the Finance and Industry department in the Ministry of Finance, said NagaCorp’s earnings had been protected slightly by its monopolization of Phnom Penh’s gaming market.

“Naga is one of the exclusive gaming companies in Phnom Penh so it is not affected by the competition,” he said.

He added that the government’s crackdown on illicit slot machine business in early 2009 had also likely helped NagaCorp.

Founded in 1995 and listed on the Hong Kong Stock Exchange, NagaCorp is the only casino operator in Phnom Penh. It’s share price closed at HK$0.87 yesterday, an increase of four cents compared to the previous day.

 

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