Quarterly Activities Report
- Star Vegas remained temporarily closed and Aristo remained open on a limited basis due to COVID-19 related restrictions.
- Increasing vaccination rates in Thailand and Cambodia have led both countries' Governments to target the easing of travel restrictions during the December 2021 quarter.
- Cash burn of approx. USD$380,408 per month, well within the targeted range.
- Group revenue of A$7.6m (September 2020: A$0.3m), stemming from operational inactivity due to COVID-19 restrictions.
- Proactively reduced balance of Mega Bank Facility to USD$3.8m, with Donaco remaining on track to make final debt payment in December 2021.
- Cash position of A$5.2m as of 30 September 2021.
Donaco remains focused on preserving its balance sheet and operational capabilities amid the ongoing COVID-19 pandemic and the subsequent effects on the Company's casinos. As a result of government-mandated restrictions, the Star Vegas casino in Cambodia has been temporarily closed since 27 April 2021, until further notice, and the Aristo casino in Vietnam has been operating on a limited basis since May 2020.
The ongoing restrictions have heavily reduced visitation numbers, affecting revenue and EBITDA, and resulting in Group revenue of A$7.6m and negative EBITDA of A$0.3m.
However, the Governments of Thailand and Cambodia have both outlined significant reopening plans during the December 2021 quarter.
The Thailand Government is set to commence quarantine-free entry and departure for vaccinated people to and from selected countries, including Cambodia, from next month.
Earlier this month, the Cambodian Prime Minister stated that the Government is targeting the reopening of the "economy and society across all sectors", next month. Additionally, earlier this month the Cambodian Government reopened e-visa applications for international travellers coming into Cambodia.
Donaco's Star Vegas casino is located in Cambodia next to the Thailand border.
A continued strong emphasis has been maintained on prudent cost control measures and ensuring a robust balance sheet, with a reduction in cash burn to A$0.4m, compared to $0.7m in the prior corresponding quarter.
In the June 2020 quarter trading update (see ASX announcement dated 31 July 2020) Donaco set a monthly target cash burn rate from maintaining the casino assets and associated corporate costs, amid the effects of COVID-19 impacts, of approximately USD$800,000 to USD$900,000. The September 2021 quarter result was better than the targeted range, with a cash burn of approximately USD$380,408 per month during the quarter.
As at 30 September 2021 Appendix 4C, cash holdings were A$5.2m.
An amount of A$197,850 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 continued to repay its debt facility diligently and proactively with principal lender Mega Bank from the initially borrowed amount of A$131.54m, to the remaining sum of A$5.27m (USD$3.80m) as of 30 September 2021 (total debt as of 30 June 2021: USD$8.34m; Mega Bank debt as of 30 June 2021: USD 6.8m).
Donaco remains on track to successfully pay the final instalment of USD$1.8m by 31 December 2021.
Non-Executive Chairman of Donaco, Mr Porntat Porntat, commented:
"This was another challenging quarter for Donaco as the impacts of COVID-19 continued to linger on our casinos and the broader communities where we operate.
"During the quarter we focused on positioning the Company optimally to target significant growth once the external conditions improve; by proactively reducing our Mega Bank debt to preserve a robust balance sheet and maintaining prudent cost control.
"There are positive indications that COVID restrictions relevant to the region Star Vegas operates in will ameliorate in the near-term, with the Governments of Thailand and Cambodia both outlining reopening plans following strong vaccination rates in the two countries.
"Vaccination rates in Vietnam have also been starting to ramp up substantially since September, which is a highly positive sign for our Aristo casino.
"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.
"I would like to again thank our shareholders for their loyalty and patience during this period."
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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