Nagacorp (3918) H1 2024 earnings summary

Executive summary

• Net loss of US$1.0 million in 1H2024, mainly due to a non-cash impairment loss of US$89.1 million on the Vladivostok Project; excluding this, net profit was US$88.1 million, up 6.2% year-over-year.

• EBITDA reached US$144.6 million, a 1.0% increase year-over-year, but reported EBITDA dropped 61.3% to US$55.5 million due to impairment.

• Gross Gaming Revenue rose 12.3% year-over-year to US$283.4 million, driven by a 17.8% increase in Mass Market GGR.

• Mass Market segment accounted for 67.7% of GGR and 73.9% of total gross profit, maintaining a high gross profit margin of 89%.

• Business volumes benefited from increased tourist arrivals, a stable expatriate market, and effective operational strategies.

Financial highlights

• Revenue for 1H2024 was US$292.8 million, up 11.3% from US$263.0 million in 1H2023.

• Gross profit rose to US$231.0 million (79% margin), compared to US$202.7 million (77% margin) in 1H2023.

• Mass Market revenue grew 33% year-over-year to US$130.6 million; Premium VIP Market revenue decreased 4% to US$60.3 million; Referral VIP Market revenue increased 18% to US$31.1 million.

• Non-gaming revenue declined 12.6% year-over-year, mainly due to lower hotel room rates.

• Administrative and other operating expenses (before impairment, depreciation, and amortisation) increased 39% year-over-year to US$84.9 million.

Outlook and guidance

• Cambodia's GDP growth is forecasted at 6.0% for 2024 and 6.1% for 2025, with tourism and FDI as key drivers.

• The new Phnom Penh Techo Takhmao International Airport is expected to open in 2025, boosting tourism and business travel.

• Ongoing recovery in tourism and new direct flights expected to boost visitation and business volumes.

• Naga 3 Project basement works are nearly complete, with further progress expected by Q4 2024.

• The company remains optimistic about long-term prospects, expecting continued recovery in tourism and business visitation.