Analysts at Moody’s Investors Service believe NagaCorp will improve its performance in the following months due to the easing of pandemic-related restrictions.
Cambodia.- Moody’s Investors Service has reviewed NagaCorp’s outlook, finding that the company’s “B1” credit rating reflects the “dominant position” of its NagaWorld casino resort in Phnom Penh, Cambodia.
Analysts predict a recovery in NagaCorp’s operating performance in 2022 following the reopening of its casinos in September 2021 and further easing of pandemic-related restrictions given Cambodia’s vaccinate rate.
Last September, the company was allowed to reopen its casino in Cambodia after six months of closure due to Covid-19.
Moody’s stated: “NagaCorp’s rating is one notch above Cambodia’s sovereign rating, based on our assessment that the likelihood of the company being affected in the event of a weakening in Cambodia’s economic fundamentals is low.”
The agency said NagaCorp, which operates NagaWorld in Phnom Penh, is “isolated to some extent from domestic conditions” in Cambodia “because it generates most of its revenue from tourists and does not rely on local banks or capital markets for funding.”
Despite this, Moody’s rated NagaCorp’s outlook at “negative” compared to its “stable” assessment for the host nation’s credit outlook.
Sweta Patodia, Jacintha Poh, and Vikas Halan, analysts at Moody’s, stated: “NagaCorp’s rating is constrained by its single-site operations as well as exposure to political risk and the evolving regulatory framework in Cambodia.”
The casino operator has shared its operating results for the financial year ended 31 December 2021, reporting gross gaming revenue (GGR) of US$223.5m. NagaCorp reported earnings before interest, tax, depreciation and amortization (EBITDA) of US$15.6m and Adjusted EBITDA of US$22.4m.
Over 100 striking NagaWorld workers arrested
Cambodian police arrested more than 100 striking NagaWorld casino workers for violating Covid-19 health protocols. Some 64 people were arrested at the casino complex on February 21 and 39 on February 22. According to local media reports, the arrests happened after two workers tested positive for Covid-19.
Strikes started on December 18 2021 after NagaCorp implemented plans to reduce pay and lay off employees to improve cost efficiency due to the impact of the Covid-19 pandemic.