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Naga Corp maintains operational profitability with $17.7M net income in first half results

Naga Corp (SHKE: 3918) the Hong Kong-listed operator of Phnom Penh casino complex Naga World has posted $17.7 million in first-half net income as shareholders lose $77.2 million attributable to the suspension operations due to COVID-19 since March this year.

Gross Gaming Revenue was $129.3 million which consisted of VIP Market $80.5 million, Mass Market Tables of $29.9 million, and Mass Market Electronic Gaming Machines of $18.9 million. This was down from $372 million over the same six month period last year.

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) was $11.2 million which after adjusted EBITDA came to $17.7 million. However, the net loss attributable to company shareholders was $77.2 million.

Naga Corp’s stock price rose around 3.3% after its interim financial report was released yesterday. Naga World’s share price had fallen from HKD 10.96 in February to HKD 5.96 in daily trade.

The company forecast a positive but uncertain outlook listing Cambodia’s high level of vaccination rates, strengthening Cambodia-China economic ties, and a possible reopening of Cambodia’s tourism industry in the fourth quarter of this year to fully vaccinated tourists.

“As of 30 June 2021, the Group’s cash and deposits were $275.4 million. The Group has sufficient liquidity and cash reserve to fund cash expenditures during the voluntary temporary suspension of business operations. The Company has no debt repayment obligation until July 2024.”

“Looking ahead, 2021 will remain challenging largely resulting from economic uncertainties arising from the unprecedented COVID-19 pandemic.”

“Nonetheless, with the relaxation of restrictions and the global economy slowly returning to normalcy, NagaWorld is expected to continue drawing tourists from South East Asia and East Asia, especially with incoming business migration inflows to Cambodia. The Group expects to continue its growth trajectory, and believes that the long-term prospects and outlook of the Group will remain stable,” the company stated.

It also disclosed the development of its $3.5 billion ‘Naga 3’ project’s design development work is ongoing and is on schedule to complete the drawings for the super-structure construction.

The target for commencing this work is the first half of 2023 after the foundation and basements have been completed and handed over to super-structure construction teams, they stated.

In response, the COVID 19 impact the company has reduced its total workforce from 8,371 in December last year to 6,958 as of 30 June costing a total of $66.2 million for the six months.

NagaWorld is Phnom Penh’s only integrated hotel and entertainment complex and we enjoy a 70-year casino license that will run until 2065, as well as exclusive rights to operate casinos within a 200-km radius of Phnom Penh (except the Cambodia-Vietnam border area, Bokor, Kirirom Mountains and Sihanoukville) that expires in 2045.

Chinese Malaysian businessman Chen Lip Keong is the founder and majority shareholder of Naga Corp. He received Cambodian citizenship in October last year.

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