Firm on track with 73pc net profit rise
Cambodia-based leisure and entertainment gaming company NagaCorp maintained its growth momentum with net profit up by 73 per cent for the year ended December 31, amid a competitive and robust gaming climate throughout the Asia-Pacific region. The company said its net profit for fiscal year 2010 was US$44.1 million, compared with US$25.5 million in 2009.
During the year under review, NagaCorp's total revenue was US$150.5 million, up 28 per cent year-on-year.
It said the group achieved these results by staying focused on its strategy of building up its public floor and gaming machines business driven by market demand. This resulted in a more efficient business mix, and produced lower earnings volatility.
During the period, 64 per cent of the group's total revenues were derived from its non-junket business, compared with 55 per cent in 2009.
NagaCorp's board declared a final dividend of 77 US cents per share.
The proposed final dividend, together with the interim dividend paid, is US$1.48 per share, representing a dividend payout ratio of 70 per cent for the year ended December 31.
The growth of the group's gaming machine business was fuelled by demand for the modern gaming machines it offers, marketing initiatives and continued enforcement of the closure of other slot machine and sports betting station outlets in Phnom Penh.
During the year, revenue from gaming machine stations rose by 31 per cent to US$44.9 million.
As at December 31, there were 1,032 slot stations compared with 618 in 2009.
Revenue from public floor gaming tables continued its growth, demonstrating that NagaCorp's business strategy, revised to focus on the mass gaming market, was a step in the right direction.
The company said that by concentrating on untapped markets, revenue of the segment rose by 69 per cent to US$41.5 million in fiscal year 2010 from US$24.6 million in 2009.
Sustained tourist arrivals in Cambodia, along with a stable political environment, have enabled the company to continue penetrating the mass gaming market and delivering on its business remodelling strategy.
This remodelling has focused on a shift in the group's business mix and has meant more build-up of its public floors and gaming machines, driven by market demand.
At the same time, the group has maintained a prudent, conservative approach on its junket segment.
Within a competitive and burgeoning gaming climate throughout Asia-Pacific, NagaWorld's performance has kept pace with the robust levels of intra-regional travel and consumer spending, which is driving steady growth in gaming revenue.
Financial indicators point to NagaWorld's competitive efficiency and margin levels compared with other gaming operations throughout the region. Even as new gaming facilities have been launched in Singapore, and Macau sees record levels of revenue, NagaWorld has remained comparatively in line with its regional competitors.
During the past year, NagaWorld has co-marketed and hosted a series of promotional events.
These efforts, along with streamlining and constantly improving the group's food and beverage outlets, helped the group secure a number of awards during the past 12 months.
Looking ahead, the company said it would continue to pursue the following strategic priorities this year: push for greater regional gaming market share through providing innovative mass market appeal, and non-junket programme; lower daily earnings fluctuations by maintaining popular and reasonable table limits, and higher business volume from the mass market; cost control and margin improvement by maintaining an efficient and yet competitive commissions to operators, along with higher business volume from the mass market, where no commissions are paid; and to continue to maintain a solid cash position by allowing gaming on cash terms only.