Asian Leisure and Hospitality firm specialising in casino and hotel operations across six countries; Donaco International, has today issued its first quarter report for 2020 as figures show the company’s revenue has fell almost sixty percent.
Mel Ashton, chairman of Donaco International commented on the report:
“This was a tough quarter for Donaco with both of our casinos impacted by COVID-19. Now that our casinos are temporarily closed, the preservation of liquidity is a key priority.
We will continue to make sure we have adequate measures in place and remain in a healthy financial position for when operations restart.”
The quarterly report shows that revenue has dropped to ten million dollars, down from 25 million the previous year.
‘The March quarter was significantly impacted by the onset of COVID-19 and the resultant restrictions on casino operations and border closures.’
- Quarterly revenue of $10.53 million compared to $25.50 million in prior corresponding year
- Board and Management continue to tightly control operating and capital expenses while operations remain impacted by COVID-19 restrictions
- Settlement reached with Thai Vendor to preserve shareholder value
- Ongoing discussions with principal lender Mega Bank
- Financial position strengthened by cash balance of $18.87 million as at 31 March 2020
The Company has a negative cash flow from operations of A$5.1 million and net debt increased from A$50.9 million in pcp to A$60.8 million.
Further, DNA Star Vegas and the Aristo Hotel have now been closed since 1 April 2020 due to Government orders in both Cambodia and Vietnam to temporarily close all casinos.
Aristo may reopen in May 2020 depending on a decision from the Government of Vietnam.
The closure of both casino operations is having a material impact on Donaco’s business while the Company is undertaking measures to reduce costs, including headcount, to preserve liquidity.
DNA Star Vegas
The VIP turnover decreased significantly by approximately 70% compared to the previous corresponding period mainly due to a drop in average daily visitations resulting from the COVID-19 pandemic and prior to this some of the other trading issues affecting the business including illegal casinos in Bangkok and increased competition in Poipet.
The average daily visitation dropped to 2,584 from 4,237 compared to the previous corresponding period.
Aristo International Hotel
Aristo was heavily impacted by the COVID-19 pandemic due to its proximity to the Chinese border, the reliance on Chinese customers and the restrictions and border closures resulting from the crisis.
The Aristo business recorded a lower rolling chip turnover of USD$105.5m over the March 2020 quarter, compared to USD$294.1m in the March 2019 quarter.
Net revenue fell 60% to USD$1.8m during the March 2020 quarter, due to lower net gaming revenue (down 53% to USD$1.3m) and non-gaming revenue (down 71% to USD$0.5m).
The overall VIP win rate recorded for the March 2020 quarter was 2.94%, above the 1.93% achieved during the March 2019 quarter. However, this higher win rate was offset by the effect of lower rolling turnover.
In response to the activity slowdown, management has implemented a number of cost -saving measures including a reduction in total headcount and deferring various capital expenditure projects.
Accordingly, operating expenses decreased to USD$1.5m, compared to USD$2.1m in the March 2019 quarter.