Hong Kong-listed NagaCorp Ltd (SHKE: 3918) – Phnom Penh’s exclusive casino operator of Naga World – stock price has fallen 35% to HKD 6.41 over 12 months as continuing COVID concerns and escalating local labor disputes impact operations.
NagaCorp’s investor relations has yet to respond directly to the protestors after the company made redundant over 1,300 staff in April last year.
The mass layoffs accounted for approximately 16% of the local workforce with accusations from certain groups that it has unfairly targeted union members.
The company reported a stronger than expected half-yearly result in 2021 after the company was able to post $17.7 million in first-half net income despite being closed from March to September last year.
“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.”
Escalating labor disputes continue
Protests against the mass layoff gained momentum in August last year and then escalated over the New Year period after a Cambodian court ruled them illegal and authorities were sent to disperse protesters outside its flagship casino.
Speaking to Cambodia Investment Review previously Khun Tharo, Program Manager at labor rights group CENTRAL: “We think this is a trend of union-busting using COVID as a cover. If you look at the financial history of NagaWorld there is a strong financial record. The union has tried to open more dialogue with the company such as industrial relations,” Tharo said.
“Nagaworld 3 will require over 4,000 employees, the profits should be there for its shareholders but there should be an independent audit to see if the COVID pandemic really has financially impacted the company,” he added.
Foreign embassies voice concern
Foreign embassies have now voiced their concerns after protests escalated this week and several arrests of union leaders outside the Australian Embassy in central Phnom Penh.
US Embassy posted: We are following closely the troubling arrests of NagaWorld union members for their peaceful expression and urge authorities to hear citizens, not silence them. Freedoms of speech, assembly & association are guaranteed in the Cambodian constitution.
Australian Embassy posted: We are aware of the ongoing strikes related to NagaWorld Casino in Phnom Penh. People have the right to peaceful assembly and freedom of expression, and we encourage all parties to return to negotiations in pursuit of a swift, peaceful resolution.
NagaCorp was founded in 1995 by Tan Sri Dr Chen Lip Keong. The Company owns and operates the largest integrated gaming and entertainment resort in the Mekong Region.
NagaCorp filed for its initial public offering on the Hong Kong Stock Exchange in 2006, making it the first gaming company listed on the HKSE and the first Cambodia-based company listed on a foreign stock exchange.