Cambodian casino’s fortunes make NagaCorp founder a billionaire

TAGs: Cambodia, chen lip keong, NagaCorp, nagaworld

nagaworld-nagacorp-casino-chenCasino operator NagaCorp Ltd. reports that its full year 2012 revenue rose 24.6% to $279m while net profit rose 22.9% to $113m. NagaCorp operates NagaWorld, the only licensed casino in Phnom Penh, Cambodia, which offers 138 gaming tables, 1,470 electronic gaming machines (EGM) and a 660-room hotel. NagaWorld’s gaming table revenue rose from $142.7m to $172.8m in 2012, while EGM revenue rose from $68.7m to $87.9m. Non-gaming revenue was up nearly 50% to $18m.

Like Macau, NagaWorld is increasingly counting on the mass market sector to drive profits, and the addition of its premium mass gaming area NagaRock in Feb. 2012 has proven a winner. Mass market table revenue was up 24.4% to $77.9m despite win rate falling from 24.1% to 22.4%. Mass EGM revenue was up 28% to $87.9m and the win per unit rose slightly despite a significant rise in the number of EGMs in operation (from 1,130 to 1,470). Junket & VIP revenue was up 18.4% to $94.9m on a win rate of $2.5%, unchanged from 2011.

Overall, mass market gaming produced 66% of NagaCorp’s revenues and 83% of its gross profits. Mass market margins were 91% compared to 37% for junkets & VIP. In December, NagaCorp CFO Philip Lee told Inside Asian Gaming the company “would rather have 10 [gamblers] rolling in with $100k than one with a million. We just don’t want the volatility.” NagaWorld is planning to open a Aristocrat Private Club in 2013 focused on premium mass players, as well as two more luxury VIP suites in addition to the five it opened in January 2013. These VIP suites are a “prelude” to Naga2, which officially broke ground in November. When it’s completed in 2015, Naga2 will feature 50 VIP suites, 300 gaming tables, 500 EGMs, retail space, a 4k-capacity theater and 1k hotel rooms.

NagaCorp added a $9m aircraft to its arsenal in 2012 to better enable VIPs from Malaysia, Indonesia, Thailand, China and Vietnam to patronize NagaWorld. It’s not quite Las Vegas Sands’ Air Adelson, but it’s a start. The new luxury shuttle bus service from Ho Chi Minh City is also paying dividends, and the stream of customers from Vietnam prompted the December 2012 launch of another special gaming area in NagaWorld called Saigon Palace, featuring 9 gaming tables and 120 EGMs.

On Thursday, Union Gaming Analyst Grant Govertsen said NagaWorld “still has plenty of runway remaining” and its “point of saturation is likely not yet even a speck on the horizon.” NagaWorld’s good fortune has helped NagaCorp founder and controlling shareholder Chen Lip Keong (pictured above) become a billionaire, according to the latest Forbes’ list of Malaysia’s richest people. Chen’s net worth was estimated at $195m in 2009, and NagaCorp’s stock has since risen over 500%, doubling in value over just the past year. With NagaCorp’s monopoly on Phnom Penh casinos not due to expire until 2035, Chen is a good bet to improve his Forbes’ ranking in the coming years.


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