Quarterly Activities Report
- Latest wave of infections in Thailand and Cambodia have led to the temporary closure of Star Vegas.
- As a result of the casino's inactivity, Group revenue of A$1.5m compared to March 2020 Quarter revenue of A$2.8m.
- Continued cost control measures remain in place.
- Reduced debt levels to USD$8.34m and new loan repayment plan agreed with Mega Bank with final payment in December 2021.
- Cash position of A$6.3m as of 30 June 2021.
Donaco is continuing its mitigation efforts following the recent outbreaks of COVID-19 in the regional area near Star Vegas. As a result of the latest wave of infections, Cambodian local authorities mandated the temporary closure of all casinos in the Banteay Meanchey province to prevent the curb in community outbreak, leading to the temporary closure of Star Vegas since 27 April 2021, until further notice.
The ongoing outbreaks have heavily reduced visitation numbers, affecting revenue and EBITDA, and resulting in Group revenue of A$1.5m and negative EBITDA of A$0.5m.
The Donaco Board and Management have taken all necessary actions to minimise the impact from the virus on its Star Vegas and Aristo operations; and keeping staff and visitors safe remains top priority.
A heavy emphasis has been kept on continued cost control measures and mitigation activities, resulting in the reduction in operating expenses to A$1.3m compared to the prior corresponding quarter.
As at 30 June 2021 Appendix 4C, cash holdings was A$6.3m.
An amount of A$194,327 was paid to related parties during the quarter, which is associated to salaries and fees to executive and non-executive directors.
Mega Bank Facility
Donaco has been diligently repaying its debt facility with its principal lender Mega Bank from the initially borrowed amount of A$131.54m to the remaining sum of A$11.09m (USD$8.34m) as of 30 June 2021. In light of the temporary closure of Star Vegas, a new loan repayment plan was agreed with the lender, comprising an alternative monthly repayment of USD$1m over six monthly instalments commencing in June 2021 to November 2021, and a final instalment of USD$1.8m to be paid by 31 December 2021.
A shareholder loan from Mr. Lee Bug Huy, aka Techatut Sukcharoenkraisri, Chief Executive Officer & Executive Director of Donaco, was approved by the Board to borrow a sum of up to USD$7.8 million. The loan is repayable over the next three years, on terms that are materially the same as those of the Mega Bank facility. The loan is expected to be repaid from operational cash flow, within the loan term.
The Governments of Thailand and Cambodia are rolling out vaccinations in their respective countries to curb the latest Delta variant.
The Thai Government has secured 150 million doses to minimise the risk of infection, with a total of more than 12 million vaccine doses administered to date, at a rate of 270,000 doses administered daily.
Looking at Cambodia, the country was also recently hit by a wave of infections and early vaccinations have commenced. More than 8 million people have received the COVID-19 jab to date, and Cambodia is now second only to Singapore for the number of vaccinations it has provided in the region.
Non-Executive Chairman of Donaco, Mr Paul Porntat, commented:
"This hasn't been an easy period for Donaco. The pandemic has impacted the industry as a whole, and society as a whole as a direct result of restrictions, and prioritising public health and the safety of our staff and visitors has remained a number one priority.
"Following the order from the Cambodian local government for the closure of casinos in the region to prevent community outbreak, including Star Vegas, we have continued to focus on protecting our balance sheet, and we've taken rigorous measures to protect the business by keeping our costs down and preserving our cash.
"Nonetheless, we are ready to bounce back once conditions improve as vaccinations are rolled out. As recently demonstrated, Donaco made a profit during the December quarter which was a remarkable achievement in the current circumstances, and this gives us confidence in our capabilities to bounce back once the situation recovers.
"Vaccinations will continue to be administered across Southeast Asia during the second half of the year to curb the virus and its new variant. In the meantime, we are well-equipped to meet the challenges we expect to face in the short term and we are ready to move forward once external conditions stabilise.
"I'd also like to take this opportunity to thank all of you, our shareholders, for your patience and understanding during this period."
The following update compares in AUD the three months to the end of June 2021 to the three months to the end of June 2020 and is based on unaudited management accounts.
DNA Star Vegas
Star Vegas, situated in Cambodia on the border with Thailand, has been temporarily closed since 27 April, and minimal activity occurred before its closure as outbreaks were increasing.
The business kept low operating expenses which decreased to A$0.84m for the period.
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