Net profit of Cambodian casino operator NagaCorp Ltd. jumped 20.3 percent in the first half of 2017, thanks to a sizzling hot VIP market.
In a disclosure to the Hong Kong Stock Exchange, NagaCorp announced that it posted a $150.6 million net profit in the first six months of the year due to robust growth across all of its business segments.
Gross gaming revenue rose 40 percent to US$386.8 million in the January to June 30, 2017 period, according to the casino operator.
NagaCorp cited at least three reasons for the company’s growth in business volumes and GGR.
It first pointed out that the continued confidence in the political climate and social order of Cambodia’s operating environment led to favorable economic conditions and increasing visitation, especially from China.
The confidence also led to increased numbers of investors and a growing expat population in Phnom Penh and driving footfall into NagaWorld.
The third reason that NagaCorp gave was the completion of Naga2, which it said strengthened the Company’s balance sheet.
NagaWorld – located in Cambodia’s capital Phnom Penh – saw VIP rolling chip turnover increase by 70.7 percent in year-on-year terms to $7.77 billion, stated the firm.
The VIP win rate for the period stood at 2.7 percent, it added. This translated into an 88.6 percent increase in VIP revenue to $210.5 million during the period.
“The competitive overseas junket incentive program introduced in March 2013 continues to enable the Group to balance the increase in table limits while managing volatility and credit risk,” it said.
Meanwhile, the mass market segment saw public floor tables buy-ins and EGM bills-in increase by 23% and 15% respectively during the period.
“This business volume growth [in mass market] is attributable to the improved headcount at NagaWorld as a result of visitation and tourism growth into Cambodia, particularly from China which recorded 36 percent growth in the first five months of 2017,” NagaCorp said.