NagaCorp Outlook ‘Optimistic’ for Recovery as Workers Wait for Support, Layoffs

3 min read
The park in front of Phnom Penh’s NagaWorld hotel and casino complex, decorated for Chinese New Year, on March 1, 2021. (Danielle Keeton-Olsen/VOD)

NagaWorld earned $102.3 million in net profit last year despite the pandemic and expects a rosier outlook in 2021, according to its latest annual report, though a union leader said workers are concerned about whether they can keep their jobs or receive financial assistance during the pandemic.

According to the report, the company, which the union says is planning layoffs for 1,300 workers due to Covid-19 disruptions, earmarked $94 million in profit dividends to shareholders — with 94 percent of the shares controlled by CEO Chen Lip Keong, who also received a $26.2 million bonus.

Meanwhile, total staffing costs for the year for over 8,300 workers totaled $105 million, the report says.

The 232-page annual report, issued last week and which follows an earlier disclosure of profits, came as Cambodia witnessed a surge in Covid-19 cases.

The company’s Phnom Penh casino NagaWorld temporarily closed its doors from March 2 as case numbers mounted.

The report cites the country’s infection count on March 7, when there were only 494 active cases, and says the transmission was “well contained.”

As of Monday, however, Cambodia has 6,892 active Covid-19 cases. Phnom Penh and Takhmao city entered lockdown five days before the report was published.

“As the circumstances surrounding COVID-19 continue to improve, we remain optimistic that tourism and the larger business environment within Cambodia will be likely to stabilize and continue to improve,” the report says.

The annual report comes as the NagaWorld union is asking whether workers will receive support during the citywide lockdown, and is waiting to hear if NagaWorld will lay off more than 1,300 workers, as they were told by the company earlier this month.

Union president Chhim Sithar said she filed a letter with the company’s chief operating officer Mike Ngai on Monday asking about future support during the casino’s closure, adding that the company has been “silent” on the layoffs.

Sithar previously said the company had told employees it would lay off 1,329 employees  between April 19 and 23 due to financial shortcomings during the pandemic.

The annual report notes that the company did not cut any employees last year while weathering Covid-19 shocks, calling NagaCorp “a responsible corporate citizen.”

NagaWorld’s head of human resources Hein Dames declined to comment.

The company’s net profit margin — or earnings after all business expenses are paid — was 11.6 percent for the year, down from 29.7 percent in 2019.

Revenue dropped to $878 million from last year’s record $1.75 billion. According to the report, revenue from gaming tables fell 50 percent and electronic machines fell 48 percent, while revenue from Naga’s hotels, food and beverages plummeted 75 percent. 

According to the report, Nagaworld employs 8,371 workers, with staff costs totalling $105.3 million last year.

Of the $102 million net profit, $94 million is due to be paid out to shareholders as dividends, it says.

Chen, the company’s CEO who gained Cambodian citizenship last year and has an estimated net worth of $3.8 billion, has direct or underlying interests in 4.07 billion shares of the company, or almost 94 percent of the total Naga Corp shares issues, through companies and his family’s trust, the report says.

Chen also is the company’s highest earning employee, bringing in a total $26.9 million last year. His base salary of $605,000 — which the report says was halved during the closure — is supplemented by a $150,000 discretionary bonus and another $26.2 million granted as an annual performance incentive from 2019 but deferred to last year.

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