NagaCorp EBITDA unlikely to return to pre-Covid-19 levels until 2025, analysts say

Citigroup blames the demise of the VIP junket sector.

Cambodia.- Analysts at Citigroup say the decline in the VIP junket sector means that that NagaCorp EBITDA unlikely to return to pre-Covid-19 levels until 2025. In an investment memo, they note that the operator has been historically reliant on VIP gaming gross gaming revenue.

NagaCorp reported a 57.4 per cent rise in net profit to US$83m for the first half of 2023. EBITDA was US$143.2m, 10.1 per cent higher than in the prior-year period. However, these gains are small in comparison to the performance of major casinos in Macau, Singapore, Malaysia, and the Philippines, which have seen EBITDA levels ranging from 53 to 164 per cent of 2019 levels.

In the VIP market segment, NagaCorp saw an 8.6 per cent increase in average daily rollings from US$10.8m in Q1 to US$11.8m in Q2. The referral VIP market experienced sequential growth of 40.9 per cent, with average daily rollings climbing to US$6.1m.

However, Citigroup’s outlook remains cautious. The memo suggests that when mainland Chinese players begin to travel again, they are likely to favour other regional casinos with enhanced offerings. It has forecast EBITDA of -US$392m for 2024, -58 per cent of that generated in 2019.

See also: Morgan Stanley: NagaCorp likely to refinance US$470m bond