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Senior Employees Braking Nagarkov Earnings

A note from Credit Suisse Group AG said the increase in employee costs following the expansion of senior management would likely serve as a brake on the first-half net profit of Cambodian casino operator Nagakov.

Hong Kong-listed Naga Corp reports results for the first half of 2014 on August 6.

"Despite strong headline revenue growth of 21% in the first half of 2014, we expect [Nagakov's] net profit to slow from +24% year-over-year in 2013, increasing employee costs amid an expansion of senior management over the last six to nine months," said Kenneth Fong, director of equity research at Credit Suisse (Hong Kong) Limited and his colleague Isis Wong.

In May, Nagarkov chairman Tim McNally told GGRAsia that over the past 12 months, he has been expanding table limits for junket partners who will work on a revenue-sharing basis with Phnom Penh casino resort Nagarwold (pictured).

Nagakov has a 70-year casino license in Cambodia and holds a 41-year monopoly (expired in 2035) within a 200km (124 miles) radius in Phnom Penh, as well as operating until 2065.

Credit Suisse says some current field work at Nagaworld likely had a negative impact on the resort's electronic gaming business in the short term.

"We expect the growth of our EGM (mainly local market) business to slow in the first half of 2014 due to the suspension of business due to the construction of Naga Citywalk (reduced footprint) and the construction of new EGM pipes," Credit Suisse said.

Union Gaming Research Macau Inc said in a July 16 report that it expects a new retail store, Naga City Walk, to be completed by the end of the year, which is under construction next to the existing property.

"The [Naga] City Walk project is unlikely to be a big revenue driver on its own, but we believe it will be an important retail amenity component as it relates to a growing Chinese customer," Union Gaming said.

Naga Corp is planning a casino resort in Russia's Far East coastal states for its first foray outside Cambodia. Union Gaming said in a July report that the company could start building a $350 million project early next year. This would mean an opening in early 2018, the research house added.

BY: 프라그마틱 슬롯 사이트

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