NagaCorp Ltd, operator of NagaWorld in the Cambodian capital of Phnom Penh, has revealed it will recognize an impairment of between US$85 million and US$95 million in relation to its Russian integrated resort project when it reports its financial results for the six months to 30 June 2024.
The company issued a profit warning on Monday in which it said it expects to record a profit/loss attributable to owners of the company of between a US$3.1 million profit and a US$6.9 million loss in 1H24, down from a profit of US$83 million a year earlier.
This, it explained, is primarily due to the preliminary findings from an independent revaluation of the group’s gaming and resort project in Vladivostok, Russia, which indicates the expected impairment. NagaCorp said its Board concurs with the assessment.
“Such impairment was due to an increase in the discount rate used for the purpose of determining the project present value and the lower business volume expected to be generated from the Vladivostok Project,” it said.
“Notwithstanding the above information, the overall financial position of the Group remains healthy. The expected impairment is unrealized and does not affect the operational cash flows of the group.”
NagaCorp announced in March 2022 the indefinite suspension of its Vladivostok development, citing “various uncertainties” which allowed it to invoke a force majeure clause set out in its investment agreement. It still remains unclear if or when the development will resume.
The Vladivostok project was one of two casino resorts due to open in the Primorye Economic Zone in 2022, alongside Diamond Fortune Holdings’ Imperial resort. They were to join the two casinos already in operation – Tigre de Cristal and Shambhala – as part of a local IR cluster. Tigre de Cristal owner Summit Ascent Holdings also put on hold plans for an expansion of its property.
Designed by Steelman Partners, NagaCorp’s development is if complete planned to include a casino and concert hall within an 11-storey hotel complex, plus a water park.