The enormous growth in gaming volumes enjoyed by Cambodian integrated resort operator NagaCorp since the launch of Naga2 in November will likely see the company move ahead with plans for a Naga3 expansion sooner rather than later, according to Union Gaming analyst Grant Govertsen.
His comments follow a record-breaking six months at NagaWorld, where revenue grew 85% year-on-year to US$713.9 million and net profit jumped 20% to US$180.1 million in 1H18. The results included 117% growth in VIP rolling chip to US$16.8 billion which translated to a 75% jump in VIP revenue to US$552.8 million, thanks largely to the addition of leading Macau junket operator Suncity Group on 1 March 2018.
In particular, Govertsen likened NagaWorld’s performance to the level of growth usually restricted to Macau’s biggest IRs.
“Ultimately, the addition of high quality supply has spurred demand and NagaCorp is generating Macau flagship-like gaming volumes and levels of EBITDA typically only seen at 1st-tier operators,” he said.
He also pointed to a series of converging positive factors including the ongoing ramp of Naga2, increased visitation to Cambodia – specifically from China – and penetration into new markets as indications NagaWorld will enjoy double-digit EBITDA growth over the next few years, prompting the likelihood of further expansion of the property.
“On a longer-term basis and with 18 years of exclusivity remaining on the company’s license, we look for even more supply to be developed,” Govertsen said.
“We look for Naga2 to continue to ramp over the coming months and expect the company to move forward with Naga3 in some fashion over the next few years.”