Leaner, meaner operator shows sustained growth
Integrated gaming and entertainment hotel complex operator Naga Corp saw healthy growth of 14 per cent in its net profit for the six months ending on June 30, 2012. The company says it is satisfied with the results as all segments of the business experienced growth.
"The business growth and the volume growth has been satisfying, especially as the growth cuts across the board," says chief financial officer Philip Lee Wai-tuck.
Net profit increased to approximately US$52.4 million for the six months under review, compared with US$45.9 million last year. The company achieved this by registering higher business volume across all business segments and continuous improvement in operational efficiency.
Naga says that revenue increased by 18 per cent to approximately US$132.2 million for the six months ending on June 30, from US$111.8 million for the same period last year, while earnings per share were 2.52 US cents, an increase of 14 per cent compared with 2.21 US cents per share in the same period last year. Naga's board declared a dividend of 1.51 US cents per share for the period. These dividends will be paid on September 28, 2012, the company says.
Lee says the prospects for the growth of the integrated resorts and hotel look positive. He
points to tourist arrivals in Cambodia, which outpace worldwide tourism growth with a 26.8 per cent increase to 1.76 million visitors in the first six months of this year as compared with the same period last year. Tourist arrivals from Vietnam rose to 378,133, an increase of 30.5 per cent year-on-year. Laos and Thailand tourist arrivals saw year-on-year increases of 87 per cent and 90.8 per cent respectively, registering 103,233 visitors and 91,855 visitors respectively.
Tourist arrivals in Cambodia from the Indochina region accounted for 32.8 per cent of total tourist arrivals during the first six months. Vietnam accounted for 21.5 per cent of total tourist arrivals, representing the largest proportion of arrivals, according to Ministry of Tourism figures.
NagaWorld launched its first loyalty programme called the Golden Edge Rewards Club in January this year. and has more than 14,300 members. The Hong Kong-listed firm says the loyalty programme will enable NagaWorld to better understand the members profile and create targeted gaming and promotional marketing efforts.
The strong visitation from the Indochina region, especially Vietnam, has encouraged the company to stay focused to attract visitors from this market. In May this year, the group opened its first office in Ho Chi Minh City to help with sales and marketing efforts in Vietnam. The company launched a luxury bus service from Ho Chi Minh City to Phnom Penh, as a part of efforts with the Cambodian ministry of tourism to promote tourism to the country.
Lee says through the mass market business, NagaWorld will continue to benefit from the strong growth in tourist arrivals in Cambodia. Tourist arrivals are estimated to increase from 3.2 million to 7 million by 2020.
The company's office in Vietnam and the soon-to-be-opened office in Thailand will enable it to drive visitation growth to NagaWorld. The company says it will continue to work closely with the Cambodian ministry of tourism to jointly promote Cambodia.
On the junket business, the company believes the conservative credit policy combined with relatively low table limits and higher rolling commissions provided to the junket operators will continue to strengthen the business.
The company says it will continue to grow the low to mid-end junkets business, conservatively penetrate the higher-end junket markets and build a strong direct VIP player database.
In the longer term, the completion of Naga2 will transform NagaWorld into an integrated gaming and entertainment destination, offering international standards of products and services to its customers from surrounding economies.
This will benefit Cambodia as the host nation and, in turn, deliver value to shareholders.