NagaWorld casino sees net profit of more than $390M last year

Phnom Penh’s NagaWorld casino posted a 53 per cent net profit increase last year at $390.6 million, a sum which is almost equal to the combined net profit of all Cambodian commercial banks in 2017.

NagaWorld’s parent company, NagaCorp Ltd, is listed on the Hong Kong stock exchange (SEHK stock code: 3918).

It released its annual financial report for last year, showing a 55 per cent increase in gross gaming revenue to $1.4 billion and net profit jumped 53 per cent to $390.6 million. NagaCorp reported paying $8.81 million in income tax last year.

Mey Vann, director-general of the General Department of Financial Industry at the Ministry of Economy and Finance, said NagaWorld’s figures were unaudited.

He said the government collected more than $20 million in 2013 and 2014, despite revenue being less than it was last year, and that the company will need to pay another profit tax for non-gaming revenue – the revenue from room nights sold restaurants and others.

Vann told The Post on Sunday: “We have not finalised the auditing process. Let’s wait for the Ministry and the General Department of Taxation to finalise its audited report and see how the firm will adjust its report at the stock exchange.

“The actual tax amount that the firm pays us will be bigger than the amount it released at the stock exchange in [Hong Kong].”

Ninety percent

NagaWorld’s net profit last year is equal to about 90 per cent of the combined net profit of all Cambodian commercial banks in 2017 and almost three times more than the combined net profit of all microfinance institutions (MFIs) in 2017.

The National Bank of Cambodia (NBC) supervisory report in 2017 said all 39 commercial banks in Cambodia earned a net profit of $435.7 million and MFIs earned $137.5 million. NBC’s supervisory report for last year has not been released yet.

According to NagaCorp’s report, the sharp increase in VIP gamblers and Chinese tourists contributed to the massive increase in profits last year. The increase in VIP business volume of the group last year was due to an increase of business at the combined NagaWorld complex, especially at Naga2.

NagaCorp chairman Timothy Patrick McNally said in view of the success and fast ramp-up of Naga2 and frequent capacity constraints for both gaming and non-gaming areas, the group is in the advanced stages of planning for the development of Naga3.

He said the increasing inbound tourism – especially from China – and the stable political environment is also another major reason to encourage more investment.

“Based on feedback from stakeholders [including players, visitors, junket operators and investors], the group is confident that additional capacity is necessary to further fuel business growth [in both gaming and non-gaming] to position the group as one of the most successful integrated resorts in Asia,” he said in the filling.

Affiliated Network for Social Accountability executive director San Chey said the increasing number of casinos and their revenue is a worrying trend in terms of the social risk factors.

“I wonder what the consequences could be for the massive jump in the casino operator’s profits? Cambodia needs to speed up its finalisation of the casino law to collect more tax and offset the huge negative impact from the gambling business."

“As of now, I don’t believe that casino businesses’ tax revenue has been contributing to a solution of the issue,” said Chey.

The ministry’s figures revealed that the Kingdom granted 52 licences to casinos last year, bringing the total awarded to 150 at the end of 2018. Preah Sihanouk province alone comprises 88 licensed casinos.

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