INDOCHINA 36
Nagacorp 2017 revenue Gross Gaming Revenue $925.9m
Mass Market: Public Floor Tables
$149.7m
Mass Market: EGM
$150.9m
VIP Market
$625.3m (Source: Nagacorp)
Rail link to improve Bavet access
CAMBODIA
Naga 2 stokes VIP demand NagaCorp’s newly opened Naga2 has already attracted the attention of Asia’s VIPs and is likely to further fuel growth in the sector in 2018, after a 142 percent jump in VIP rollings last year.
T
he operator, which has a monopoly within a 200 km radius of the capital Phnom Penh, reported a 39 percent increase in net profit for the fullyear 2017, reaching $255.2 million. Gross gaming revenue increased by 85 percent to $926 million, while EBITDA increased by 25 percent to $319.7 million. Nagacorp said it continued to achieve solid growth in the mass market segment, with mass market table buy-ins up 28 percent to $787.8 million and electronic gaming machines billsin up by 21 percent to $1.8 billion. However, it was the growth in VIPs that hit the headlines. Total rollings for the year hit $21.1 billion, translating into a 177 percent increase in revenue to $625.3 million. For Q4, the group reported VIP volume of $10.1 billion. Nagacorp said the opening of Naga2 in November 2017 has significantly increased the quality and range of VIP, mass gaming and non-gaming offerings. The extension has provided the group “with a product comparable in quality to integrated resorts in more established gaming destinations,” it said. “We have consistently heard from Macau junkets that the quality of Naga2 well-exceeded their expectations and that they would have no issues in bringing more of their players to Naga,” said Union Gaming analyst Grant Govertsen. “Even in Cambodia, the adage that quality gaming supply drives demand
Asia Gaming Briefings | March 2018
holds true. We are modeling 97 percent VIP volume growth in 2018 to $41.6 billion, and 10 percent growth in 2019 to $45.7 billion.” Leading Macau junket Suncity Group was scheduled to open at the beginning of March, promising to bring its high roller clientele to the Cambodian capital. Naga2 more than doubles capacity in terms of hotel rooms and gaming facilities. It also adds a state of the art 2,200 seat theatre and additional entertainment, food and beverage options alongside the NagaCity Walk duty-free shopping mall which opened in August 2016. The company said the opening has removed many of the constraints previously faced by the group in the development of new markets and deeper penetration of its existing markets. As a whole, Cambodia has seen strong visitation, helped by a buoyant economy, which has attracted a growing number of business travellers. In 2017, visitation to Cambodia continued to grow with international arrivals increasing by 12 percent to 5.6 million visitors and arrivals at Phnom Penh International Airport gaining by 21 percent over the same period last year. Visitation from China grew by 46 percent to 1,210,782 visitors and is the leading source of visitation to Cambodia. The International Monetary Fund expects the economy to grow by 6.8 percent in 2018 after expanding by about 6.9 percent last year.
Vietnam and Cambodia are considering building a railway connecting Ho Chi Minh City with Bavet City, linking Vietnamese outbound travellers to the Cambodian casino hub. The plan was reportedly revealed during a meeting between Cambodian Transport Minister Sun Chanthol and Vietnam’s Deputy Minister of Transport Nguyen Nhat. The project is in the early stages of conceptualization, with the governments now working on a feasibility study. It is also understood that the two countries are also studying the construction of an expressway linking Ho Chi Minh City and Phnom Penh. The railway line to the west, which links Phnom Penh to Poipet on the Thai border, is set to be finished by 2018.
China influx blamed for Sihanoukville crime China’s increasing involvement and investment in the Sihanoukville Province has pushed up the crime rate and brought instability, Governor Yun Min said in a letter to the government. The three-page letter, which was sent to the interior minister said that the influx of Chinese investors had “created opportunities for Chinese mafia to come in and commit various crimes and kidnap Chinese investors, causing insecurity in the province,” the governor was reported as saying in Free Malaysia Today. Sihanoukville, a sleepy coastal town in Cambodia, has seen a surge in Chinadriven interest in the hotel and casino industry. Governor Min also admitted that Chinese investment has created jobs for the city and pushed up real estate prices.
