Moody’s Investors Service is unimpressed by NagaCorp’s plan to build a $350 million resort property near Angkor Wat’s historic temple complex, calling it “credit negative.”
According to Asia Gaming Brief, Moody’s says the Cambodian gaming operator’s capital spending plans, which will total about $4 billion through 2026 will reduce its liquidity at a time when Covid-19 has “weakened the economic environment and made the pace of recovery uncertain for the gaming industry.”
Even so, AGB reported, NagaCorp appears to be faring better than most; in its third-quarter results, the company said its mass market business had already recovered to 97 percent of pre-Covid-19 levels, with VIP play at 71 percent, thanks in part to expatriate players in the capital of Phnom Penh. Naga’s performance was helped by an exclusivity agreement that makes it the only casino operator within a radius of 200 kilometers (124 miles) around the country’s largest city.
As well as the Siem Reap project, which will not include a casino component, NagaCorp is progressing with a $3.5 billion Phase 3 expansion of its resort in Phnom Penh and building an IR in the Primorye gaming zone in Russia, near the port city of Vladivostok.
“These projects highlight NagaCorp’s increasing appetite to expand its operations and entails execution risk, although this will improve earnings and cash flow diversification in the future and reduce the company’s single-site operation risk,” Moody’s noted.
