S&P Forecasts 8% Revenue Growth for NagaCorp

S&P Global Ratings expects Hong Kong-listed Cambodian casino operator NagaCorp Ltd to record adjusted revenue growth of between 3% and 8% during 2026 and 2027. The agency has also maintained its 'B+/Stable/–' assessment, describing the company as having vulnerable business risk and intermediate financial risk.

Business Risks and Competitive Challenges

In its latest report, S&P clarified that the publication does not represent a formal rating action. The agency identified several key risks for NagaCorp, including uncertainty surrounding future funding strategies for investments and dividend payments, limited geographical and revenue diversification and increasing competition from established and emerging gaming markets such as Malaysia and Macau.

Despite these challenges, S&P highlighted several factors supporting the company. NagaCorp continues to hold exclusive gaming rights in Phnom Penh through its NagaWorld integrated resort until 2045, with the monopoly extending across a 200-kilometre radius from the Cambodian capital. The agency also noted the benefit of operating within a jurisdiction that applies relatively low gaming taxes.

S&P expects NagaCorp to remain resilient despite operating below pre-pandemic performance levels. The agency projects the company’s 2025 performance will be supported by a 27% increase in gross gaming revenue, reaching approximately US$692 million.

Gaming Continues to Dominate Revenue

According to S&P, gaming remains NagaCorp’s primary source of income, while non-gaming activities contributed less than 5% of total revenue in 2025. The agency said this heavy reliance on gaming within an emerging economy increases the company’s overall business risk.

The report also stated that NagaCorp should continue benefiting from its established expatriate customer base and the gradual recovery of Cambodia’s inbound tourism sector. Increased flight capacity between Cambodia and China is also expected to support continued growth.

Mass-market gaming remained the main driver of revenue in 2025, with segment revenue increasing 23% to US$485 million. Even with this improvement, S&P noted that the company’s reported revenue and EBITDA reached only 41% and 60% of 2019 levels, respectively.

The agency attributed this difference to the disappearance of the referral VIP business, particularly junket operations. Junkets generated around 70% of NagaCorp’s gross gaming revenue in 2019, but S&P said they are unlikely to return following China’s crackdown on junket activity, reducing a major source of historical revenue.

Financial Position and Investment Plans

S&P said NagaCorp’s balance sheet continues to provide financial stability. Since 2022, the company has limited dividend payments and capital expenditure, helping maintain low leverage while increasing its cash reserves.

The company also repaid a US$70 million shareholder loan in May 2026. S&P forecasts debt-to-EBITDA at approximately 0.3 times throughout 2026 and 2027, reflecting its conservative financial profile.

The agency said NagaCorp is still reviewing the scale of its Naga 3 development in response to current market conditions. Capital spending on the project is expected to resume in 2027. Following the cancellation of a shareholder funding agreement in December 2025, the company may revise the size of the planned US$3.5 billion project.

Depending on the final investment plan, S&P believes NagaCorp could finance the development through internal cash generation or external funding sources.

Dividend Outlook and Future Risks

NagaCorp resumed dividend payments in 2025 with a payout ratio of 30%. S&P expects shareholder returns to gradually move back toward historical levels of around 60%.

Capital expenditure is projected at roughly US$170 million in 2026 before increasing to about US$380 million in 2027 as construction of Naga 3 progresses. In addition, annual shareholder distributions are expected to range between US$100 million and US$120 million.

S&P warned that accelerating investment in Naga 3 while maintaining high shareholder distributions could place downward pressure on the company's credit rating. The agency also noted that NagaCorp has limited relationships with multiple lending institutions, including international banks, which may reduce its ability to manage significant unexpected financial events without refinancing.