Cambodia-based casino operator NagaCorp is bracing for a financial impact due to its stalled casino project in Vladivostok, Russia. The company anticipates recording an impairment charge between $85 million (€77 million) and $95 million (€86.9 million) for the first half of 2024, according to a filing with the Hong Kong Stock Exchange.   

This financial hit is expected to potentially swing the company’s earnings from a profit of $3.1 million (€2.8 million) to a net loss of $6.9 million (€6.3 million) for the period, a stark contrast to the $83 million (€75.9 million) profit reported a year ago.  

Project suspension and war-related challenges  

NagaCorp’s Vladivostok project, which began with ambitious plans to establish a major resort in Russia’s Primorye Economic Zone, has faced numerous setbacks. The project was indefinitely suspended in March 2022, shortly after Russia invaded Ukraine, as the company invoked a force majeure clause due to “various uncertainties.” Although the company did not initially specify the reasons, it later acknowledged that the ongoing war and subsequent international sanctions had severely disrupted the development.  

Strategic missteps and market shifts  

According to reports, NagaCorp initially entered the Russian market with high hopes, targeting the Primorye Economic Zone due to its strategic location near China, South Korea, and Japan — regions where gambling was heavily restricted at the time. However, the landscape has drastically changed. Japan has since approved a casino project in Osaka, and the ongoing geopolitical tensions have further complicated the Vladivostok venture, leading to re-evaluation and the substantial impairment charge now expected.  

Impact on company valuation and investor confidence  

The financial difficulties linked to the Vladivostok project have had a notable effect on NagaCorp’s market performance. Shares of the Hong Kong-listed company fell by 12 percent following the announcement, contributing to a nearly 30 percent decline in value since mid-May. Despite these setbacks, NagaCorp maintains that its overall financial position remains stable, with the impairment being an unrealized loss that does not directly affect the company’s operational cash flow.