Russia sanctions likely led NagaCorp to halt Vladivostok resort
An analyst at Daiwa Capital Markets Hong Kong Ltd has suggested NagaCorp may have decided to halt the development of its casino resort in Vladivostok due to international financial sanctions against Russia.
Cambodia.- NagaCorp’s decision to halt the development of its US$150m casino resort in Vladivostok indefinitely is likely the result of sanctions against Russia, analysts have suggested. The company gave no explanation to pause development of the Russian casino, saying only that the decision was taken in the interest of the company and its shareholders due to uncertainties surrounding the project.
However, Terry Ng, an analyst at Daiwa Capital Markets Hong Kong Ltd, said: “Management commented that the new round of sanctions affects NagaCorp’s ability to continue funding the project.”
He added that the company could sell the project and that if sanctions against Russia are not rolled back, NagaCorp’s ability to operate efficiently the project could be affected.
There are currently two casinos operating in the Primorye Gambling Zone in Russia. The first, Summit Ascent’s Tigre de Cristal, opened to the public in 2015. That was followed almost five years later by Shambhala, which opened at the height of the coronavirus pandemic.
NagaCorp’s Vladivostok resort was expected to include a multi-purpose facility measuring 21,500 square feet.
Daiwa Capital Markets Hong Kong Ltd has cut NagaCorp’s 2022 earnings before interest, tax, depreciation and amortization (EBITDA) guidance by 61.5 per cent, mainly due to a “slower-than-expected recovery in regional travel” following Covid-19-related restrictions.
The group now expects NagaCorp’s EBITDA to reach US$274m in 2022. A figure that could grow to US$473m by 2023, and to US$605m by 2024. In 2019, previous to the Covid-19 pandemic, the company generated EBITDA of US$672m.
For the financial year 2021, NagaCorp reported gross gaming revenue (GGR) of US$223.5m. Mass-market table games reached a GGR of US$66.5m and mass-market electronic gaming machines US$44m. The premium mass-market GGR was US$48.7m, while the recommended VIP market GGR was US$64.4m.
