Donaco Updates Shareholders With First Quarter Figures
The coronavirus pandemic has landed a heavy blow on ASX-listed Donaco International, which reported a 53.8 percent decline in revenue for the first three months of 2021.
Inside Asian Gaming reported that the operator’s flagship casino, Star Vegas, in Poipet, Cambodia was heavily impacted by a COVID-19 outbreak, which precipitated the revenue losses.
Net revenue fell from A$10.79 million in the first quarter of 2020 to A$6 million in the fourth quarter of 2020 to just A$2.77 million in the most recent quarter.
Star Vegas suffered a 54.9 percent decline in revenue to A$2.51 million.
In Vietnam, Aristo International Hotel, located near the border with China, continued to endure subdued visitation, with net revenue falling from A$430,000 in the December quarter to just A$260,000 in the first quarter.
By comparison, Aristo reported net revenue of A$2.64 million in the first quarter of 2020.
Group-wide earnings before interest, tax, depreciation and amortisation was A$290,000, down from A$2.67 million, but improved from an EBITDA loss of A$1.14 million in the first quarter of 2020, on reduced operating costs.
“The March quarter was a challenging period due to the COVID-19 pandemic, with the Cambodian outbreak in February leading to a more severe outbreak in April,” non-executive chairman Porntat Amatavivadhana said.
“This is an external factor, which unfortunately we cannot control. Nonetheless, we have continued to focus on what we can control, our internal operations, and protecting our balance sheet.
“We have done everything to manage what had to be managed internally within the business. We keep a conservative approach and we are ready to move forward once external conditions improve.
“Encouragingly, we are also on track to repay all remaining debt with Mega Bank by this coming June 30, and we continue to explore additional opportunities to access the gaming market.”
Poipet casinos closed again after COVID-19 outbreak
Star Vegas was forced to suspend operations as recently as late April due to the spread of COVID-19 throughout Cambodia’s Banteay Meanchey Province.
Authorities in the province, which incorporates the border town of Poipet, ordered the temporary closure of all casinos.
There were 171 cases of COVID-19 reported in the region a week ago, prompting the move by authorities.
Provincial administration director Chhoeun Kraiyong noted that guests of Poipet’s casinos were among those to have tested positive.
“Seeing the outbreak, the provincial administration decided to suspend all casinos in Poipet town. We wouldn’t have closed them if it wasn’t related,” he said.
Donaco confirmed the closures in an ASX filing.
“Donaco’s Star Vegas has temporarily closed its operations until further notice from the local government,” it said.
“The continued safety of Donaco’s staff and visitors remains paramount and the company will monitor developments and update the market once there is a further update.”
The suspension of casino operations came just days after Sihanoukville was placed into a two-week lockdown until May 6.
A nighttime curfew and travel ban in the Cambodian capital of Phnom Penh has also been extended until May 5.
Integrated resort NagaWorld, which holds a monopoly on casino operations within a 200 kilometre radius of Phnom Penh has been closed since March 1 after 11 staff tested positive to COVID-19.
