NagaCorp Anticipated to Post 3% to 8% Adjusted Revenue Growth Until 2027

S&P Global Ratings expects Hong Kong-listed Cambodian casino operator NagaCorp Ltd to deliver 3% to 8% growth in adjusted revenue over 2026 and 2027. The latest note also kept the company at a ‘B+/Stable/–’ assessment, while describing it as vulnerable on business risk and intermediate on financial risk.

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Risks And Support Factors

In its recent memo, S&P said the note did not amount to a rating action. The agency said NagaCorp’s key risks include low visibility over funding strategy for future investments and dividends, limited revenue and geographical diversity, and competition from new and existing gaming markets such as Malaysia and Macau.

At the same time, S&P pointed to several strengths. It said NagaCorp remains the monopoly gaming operator in Phnom Penh until 2045 at its NagaWorld property, with that monopoly covering a radius of 200 kilometres around the Cambodian capital. It also highlighted the company’s position in a low-gaming-tax jurisdiction.

According to the agency, NagaCorp will continue to be resilient in gaming despite underperformance compared to its pre-COVID performance. It mentioned that the performance of the firm in 2025 will depend on the 27% growth of gross gaming revenue, which will amount to $692 million.

Revenue Mix Remains Narrow

S&P said NagaCorp’s revenue remains heavily concentrated in gaming, with non-gaming revenue accounting for less than 5% of total revenue in 2025. The agency said that concentration in a volatile gaming sector in an emerging economy heightens the company’s business risk.

It also noted that NagaCorp should continue to benefit from a captive domestic market of expatriates and a gradual recovery in Cambodia’s inbound tourism business. S&P added that it expects growth to continue on increasing flight capacity to and from China.

The ratings house observed that mass-market play powered growth in 2025, with segmental revenue rising 23% to US$485 million. Even so, it said NagaCorp’s reported revenue and earnings before interest, taxation, depreciation and amortisation, or EBITDA, in 2025 were only 41% and 60% of 2019 levels respectively.

S&P attributed that gap to the elimination of the referral VIP segment, primarily junkets. The agency said junkets accounted for about 70% of NagaCorp’s gross gaming revenue in 2019 and are unlikely to return, which it said will weigh on the company’s business strength. It also said China’s crackdown on junket activity reduced contributions from the referral VIP segment, which had previously driven a significant part of the company’s business.

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Spending Discipline And Cash Position

S&P said NagaCorp’s healthy balance sheet provides a downside cushion. The company has been limiting dividends and capital expenditure since 2022, which the ratings agency said has kept leverage low while building a sizable cash balance.

NagaCorp also paid off a US$70 million shareholder loan in May 2026. S&P’s forecast debt to EBITDA at around 0.3 times for 2026 and 2027, reflecting the company’s conservative financial position.

The agency said the company is still reassessing the scale of its Naga 3 project against the current business environment. It expects expenditure on the project to resume in 2027, and said the termination of a shareholder funding agreement for Naga 3 in December 2025 means NagaCorp may rescale the US$3.5 billion development.

Depending on the revised investment amount, S&P said NagaCorp could fund Naga 3 mainly with internal cash flow or via external markets.

Returns And Project Outlook

NagaCorp resumed dividends in 2025 with a payout ratio of 30%, while according to S&P, it anticipates shareholder return gradually moving towards historical figures of 60%. Capex was estimated at approximately US$170 million in 2026, rising to approximately US$380 million in 2027 due to the construction of Naga 3, in addition to annual shareholder returns of US$100 million to US$120 million.

S&P cautioned that should NagaCorp speed up the Naga 3 expenditures and embark on extensive investments in addition to making aggressive shareholder distributions, its credit rating would likely plummet significantly. S&P also pointed out that the company does not have solid relations with various sources of lending funds, including global banks, and is likely unable to withstand high impact-low probability events without any refinancing.

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Source: GGR Asia