Quarterly Activities Report
Sydney, April 30, 2021 AEST (ABN Newswire) - Donaco International Limited (ASX:DNA) (UGS:FRA) provides the following trading update for the three-month period ending 31 March 2021.
The March quarter was impacted by the most recent COVID-19 outbreaks. As previously reported, an outbreak around the broader regional area in which Star Vegas operates emerged in January 2021 and this was followed by a much heavier outbreak in Thailand with a second and third wave of infections. As a result of the pandemic, from 27 April 2021, Cambodian local authorities have declared the temporary closure of all casinos in the Banteay Meanchey province to prevent the curb in COVID19 community outbreak following a surge in cases. This has resulted in the immediate temporary closure of Star Vegas until further notice. Additional protocols have been in place at Star Vegas and Aristo during the quarter to minimise the risk of the virus, and keeping the safety of staff and visitors has remained a number one priority. The outbreak has heavily reduced visitation numbers, affecting revenue and EBITDA for the March quarter, resulting in Group revenue of A$2.77m and group EBITDA of A$0.29m.
The decreased level of net operating cash flows for the March quarter was also due to the non-recurring repayment of a junket deposit of approximately USD3.3million/A$4.46million.
Nonetheless, the strategic initiatives Donaco has carried on implementing, which include mitigation activities and the revisions made on some service provider agreements, are supporting the Company to navigate through the pandemic. Management's continued cost control measures led to a reduction in operating expenses to A$1.70 million compared to the prior corresponding quarter.
Donaco anticipates the recent impact to be temporary, as vaccinations will commence to be rolled out across Southeast Asia during 2H FY21.
During the period, the Company completed the settlement for Star Vegas, and recorded a non-cash other-income of A$52.6m (equivalent to USD$38m) from the settlement.
Donaco is carrying on its work with Mega Bank to pay down its debt facility under the agreement, which as at 31 March 2021 decreased by A$121.28m (equivalent to US$92.20m). The outstanding debt of A$10.26m (equivalent to US$7.80m) is a significant reduction from the initially borrowed A$131.54m (equivalent of USD$100m), and the Company remains on track to repay the remaining amount in FY21.
The reduction in debt level also offers Donaco some clear air to explore additional options to access the gaming sector and allow for a diversified platform for future growth.
Non-Executive Chairman Porntat Amatavivadhana said: "The March quarter was a challenging period due to the COVID-19 pandemic with the outbreak in January leading to a more severe outbreak in April. 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 30 June, and we continue to explore additional opportunities to access the gaming market."
To view the full quarterly report, please visit:
About Donaco International Ltd
Donaco's largest business is the Star Vegas Resort & Club, a successful casino and hotel complex in Poipet, Cambodia, on the border with Thailand. Star Vegas was established in 1999, and is the largest and highest quality of the Poipet casino hotels. The property has more than 100 gaming tables, more than 1400 slot machines, and 385 hotel rooms.
Donaco's flagship business is the Aristo International Hotel, a successful boutique casino in northern Vietnam, located on the border with Yunnan Province, China. Established in 2002, the property has recently been expanded to a brand new five star resort complex with 400 hotel rooms. Donaco is a pioneer casino operator in Vietnam, and owns a 95% interest in the business, in a joint venture with the Government of Vietnam.
Donaco International Ltd