S&P Raises NagaCorp Rating to B+

S&P Global Ratings has upgraded the long-term issuer credit rating of NagaCorp from “B” to “B+”, pointing to the company’s low leverage levels, sizeable cash position, and improved balance sheet following a recovery in 2025 operations.

The ratings agency assigned a stable outlook to the Cambodian gaming operator, which runs NagaWorld in Phnom Penh. S&P said it expects the company to maintain stable operations over the next year due to its established position in Cambodia’s gaming market.

Despite the upgrade, the agency said earnings remain far below the company’s pre-pandemic performance and are unlikely to return to 2019 levels anytime soon because of the collapse of the junket-driven VIP business that once generated most of the casino’s gaming revenue.

Junket Decline Continues to Impact Performance

S&P noted that NagaCorp generated revenue of US$713 million and EBITDA of US$404 million in 2025 after a recovery in business activity. However, those figures still trail the company’s results before the pandemic.

In 2019, NagaCorp reported revenue of US$1.8 billion and EBITDA of US$667 million. At that time, around 70% of gross gaming revenue came from the referral VIP segment, which relied heavily on junket operators.

“This segment is unlikely to return and will weigh on the company’s business strength,” S&P said, as reported by Inside Asian Gaming. “We expect Naga’s earnings to grow modestly over the next two years, at 5% to 6% annually across 2026 and 2027. A return to the level of earnings in 2019 is unlikely for the time being.”

The agency also stated, “Despite a notable turnaround in 2025, operations still lag pre-pandemic levels, with a full recovery likely to be protracted.”

S&P forecasts annual earnings growth of between 5% and 6% through 2026 and 2027, supported by steady operations in Cambodia’s gaming sector. The company’s financial position was described as stronger due to low debt exposure and available liquidity.

Cash Reserves Support Rating Upgrade

According to S&P, NagaCorp held approximately US$372 million in cash at the end of 2025. The company also had only a US$70 million shareholder loan outstanding, which is due in May 2026.

The agency estimated debt-to-EBITDA at around 0.3x across 2026 and 2027. S&P added that the company’s “stronger financial position provides a downside cushion,” highlighting the benefit of maintaining low leverage while operations continue recovering.

The ratings firm also outlined a stressed scenario tied to shareholder distributions and capital expenditure plans. Under those conditions, debt-to-EBITDA could approach 3x by 2029 if dividend payouts increase to 60% and annual capital spending reaches US$650 million.

S&P identified future shareholder returns and development spending tied to the planned Naga3 expansion project as major areas to monitor under the new rating.

The agency estimated NagaCorp’s capital expenditure at around US$170 million in 2026 before increasing to roughly US$380 million in 2027 as work on Naga3 progresses. Annual shareholder returns were estimated at between US$100 million and US$120 million.

S&P warned that aggressive spending or distributions that weaken liquidity could place pressure on the company’s rating in the future. The agency said higher leverage, especially if debt-to-EBITDA rises above 3x, would be viewed negatively.

At the same time, S&P maintained that NagaCorp’s entrenched position in Cambodia’s casino industry should help support operational stability over the next 12 months.