Covid-19 interrupts Donaco’s financial recovery

Sunday 1st of March 2020

Despite turning in relatively encouraging financial results for the second half of 2019, Donaco International signalled that its Vietnam casino was being heavily impacted by border closures with China resulting from Covid-19 infection fears, and that additional financing may be necessary.

The firm reported a statutory loss of A$1.5 million in the six-month period, compared to a A$36.8 million loss the previous year. Group EBITDA increased to $13.8 million versus $12.9 million in the prior comparative period.

CEO Paul Arbuckle stated, “Despite the significant changes that have occurred at the board and management level, the businesses continue to operate profitably. Whilst the key metrics at Star Vegas showed declines in VIP turnover and slot machine revenues, this occurred in a period of transition as Donaco moved to put its junket operators on standardized contracts, and as we saw increased competition throughout the Poipet strip.”

Turning to the Vietnam property, he said, “The Aristo continued its strong performance for the six months ending December 2019, with increases in visitations generating increased VIP and main hall turnover, and increased gaming and non-gaming revenues.”

However, he added, “We recently announced that the impact of Covid-19 during February, has been significant on the Aristo, as visitation has dropped significantly with travel from China being curtailed. We expect these conditions to continue until travel restrictions are removed and will tightly manage expenses at the venue throughout this period.”

Chairman Mel Ashton added, “The Board is aware that the liquidity of the company may tighten from the closure of the border crossing between China and Vietnam in January due to the outbreak of Covid-19. Accordingly, Donaco is seeking to access financing to support payment obligations and working capital requirements of the company.”