Hong Kong-listed casino operator and developer NagaCorp Ltd, known for its flagship NagaWorld integrated resort in Phnom Penh, on June 4 announced that it has moved the $3.5 billion Naga 3 project’s planned completion date from September 30, 2025 to exactly four years later, in a bid to cut capital expenditure (capex) amid global economic concerns.

According to the company’s most recent financial report, its mass gaming division was performing at 81 per cent of pre-Covid-19 levels, with gross gaming revenues (GGR) to the tune of $117 million in the January-March quarter.

In April 2019, NagaCorp had unveiled plans for the Naga 3 on the site of the former “White Building” in Chamkarmon district’s Tonle Bassac commune, in a filing to Stock Exchange of Hong Kong Ltd (SEHK).

The filing noted that the government had approved in principle the construction of the Naga 3 integrated entertainment complex in four 42-storey buildings on 7,757sqm.

After the firm acquired an additional 9,080sqm plot adjacent to the site of the former White Building, the government then granted another approval in principle for the construction of five blocks of buildings with a maximum height of 66 storeys to serve as entertainment venues, hotels and apartments, it added.

NagaCorp company secretary “Monica” Lam Yi Lin assured in the June 4 announcement that the firm is “carefully and seriously” evaluating possibilities for the development of Naga 3 that balance revenue generation and capex, given the “external geopolitical macroeconomic environment” and “stiff global inflationary pressures”.

She mentioned that one option would be to resize the project in accordance with the terms of the Design and Build Agreement (DBA).

Nonetheless, the board of directors “wishes to announce that despite the external factors, the company is confident that it can discharge all of its financial obligations because up to date, the fundamentals and the directions of the company remain unchanged”, Lam said.

“Naga 3 Company Limited and the contractor have entered into a supplemental agreement on 3 June 2023 to update the completion date of the DBA to a date on or before 30 September 2029 subject to other further adjustments which may be mutually agreeable between Naga 3 Company Limited and the contractor,” she added.

On the Hong Kong exchange, NagaCorp’s (3918:HK) share price inched up HK$0.02 or 0.41 per cent to close at HK$4.95 on June 6 for a market cap of HK$21.58 billion (US$2.75 billion), 52-week range of HK$3.497-7.797 and trailing price-to-earnings (P/E) ratio of 26.07, with 1,296,427 shares traded or 97.19 per cent of the 65-day average of 1,333,892, according to the Wall Street Journal.

Pacific Asia Travel Association Cambodia Chapter chairman Thourn Sinan opined that the slow recovery in tourist arrivals was a contributing factor in the delay, while geopolitical developments continue to exert downward pressure on the regional and global economies.

“Despite the fact that Covid-19 has eased, there are still many obstacles to overcome, including geopolitical headwinds, elevated inflation and global economic slowdown, all of which affect people’s incomes. For this reason, we’ve also noticed a pretty sluggish recovery in tourist inflows,” he said.

According to the Ministry of Tourism, Cambodia received 1,291,539 international visitors in the first quarter of the year, skyrocketing by 709.51 per cent from 159,546 in the year-ago period, but still down 31.22 per cent from the 1,877,853 recorded in the same time of 2019.

Thailand accounted for the lion’s share of these travellers at 424,241 or nearly 32.85 per cent, followed by Vietnam (207,527; 16.07%), mainland China (132,665; 10.27%), Laos (61,709; 4.78%), the US (54,672; 4.23%), South Korea (52,578; 4.07%), France (33,442; 2.59%), Russia (32,125; 2.49%), the UK (31,057; 2.40%) and Indonesia (30,522; 2.36%).

In the January-March period, 481,582 international visitors flew into Cambodia, representing 37.29 per cent of the total, while 792,432 (61.36%) entered overland, and 17,525 (1.36%) arrived via waterways.