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NagaCorp Cambodia unlikely to return to pre-COVID EBITDA levels

September 29, 2023 Cambodia Casino & Hotel

According to a Citigroup investment paper, NagaCorp of Cambodia is unlikely to return to pre-COVID EBITDA levels anytime soon, given the expected further decline in the VIP junket market. The firm formerly generated a lot of money from VIP gaming, thus the decrease of Macau-based junkets has exacerbated the situation.

With the current postponement of Naga 3’s full debut until September 2029, NagaCorp may soon become a market share donor. Investors see the company’s decision to abandon its traditional dividend distribution method as a negative, given that distributions are not expected to resume until at least 2025.

Despite these challenges, NagaCorp’s net profit climbed by 57.3 percent in the first half of 2023, surpassing $83 million. Over the same time period, EBITDA climbed by 10.1 percent to $143.2 million. However, the investor brief noted that NagaCorp’s EBITDA comeback to 1H19 levels was less impressive when compared to other casinos in Macau, Singapore, Malaysia, and the Philippines.

NagaCorp reported an increase in average daily rollings for the VIP market of 8.6 percent to $11.8 million in 2Q23 compared to $10.8 million in 1Q23. In 2Q23, the Referral VIP Market increased 40.9 percent sequentially to $6.1 million over the previous quarter.

The study said that when departing aeroplane capacity grows, mainland Chinese players would pick other regional casinos with superior amenities. According to Citigroup’s FY24E EBITDA forecast for NagaCorp, the company’s EBITDA will only recover to -58 percent of what it was in FY19.

Related Article About: NagaWorld

Original story by: Asia Gaming Brief

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