‘Tsunami’ Sinks NagaCorp’s Profits in 2009 Gaming Profits Sink

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

Total revenue at the company fell 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. Revenue from gaming machine stations, however, increased tenfold to $34.3 million. Revenue from 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 nonjunket 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 million in 2009, while win rates rose to 16.3 percent from 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.

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.