Quarterly Activities Report
Sydney, July 31, 2020 AEST (ABN Newswire) - Donaco International Limited (
ASX:DNA) (UGS:FRA) provides the following trading update for the three-month period ending June 2020.
Highlights
- Quarterly revenue of A$0.9 million compared to A$20.3 million in prior corresponding year
- Board and Management continue cost control strategy to manage the downturn related to COVID-19 travel restrictions
- Aristo continues to operate on a limited basis as the border with China remains closed
- Settlement of all legal cases reached with Thai Vendor
- Successful support received from principal lender Mega Bank with the deferral of certain repayments and waiver on covenants to December 2020
- $14.41 million capital raising to provide immediate capital relief and stabilisation of the business
- Strengthened balance sheet of A$26.7 million pro forma post raise as at 30 June 2020
The June quarter was significantly impacted by the onset of COVID-19 and the resultant restrictions on casino operations and border closures. The closure of both DNA Star Vegas and Aristo International Hotel for an extended period of time has had a material impact on Donaco's operations.
DNA Star Vegas has been closed since 1 April 2020 following the Cambodian Government's announcement mandating the closure of all casinos from 1 April 2020. The Vietnam Government also required the closing of casinos from 1 April 2020 with casinos allowed to reopen from 8 May 2020. Despite Aristo officially reopen, the casino has been operating on a limited basis, as the border with China, where most of Aristo's patrons originate from remains closed.
The closure of the border between China and Vietnam limiting visitors to the casinos led to a drop in visitations by approx. 98% in the June quarter compared to the previous corresponding period.
As a result of the shutdowns, Donaco has placed heavy emphasis on tightly controlling and reducing costs and capital expenses to ensure the Company's sustainability into the future. With this in mind, Donaco has set a monthly target cash burn rate from maintaining the casino assets and associated corporate costs of approx. USD$800,000 to USD$900,000.
Once government restrictions are eased, and as visitations remain subdued, the casino businesses may need to operate at a level which is not at full operating capacity.
Non-Executive Chairman Mel Ashton said: "We have taken pragmatic measures to adopt a cost control strategy at both casinos as Donaco continues to be impacted by COVID-19 related travel restrictions.
A number of positive events occurred during the period as the settlement reached with the Thai Vendor and the support received from principal lender Mega Bank with the deferral of certain repayments and waiver on covenants until the end of the calendar year. The Placement undertaken also reduces debt, and provides immediate financial stability to the Company."
As per 30 June 2020 Appendix 4C, cash and cash equivalents is A$12.8 million.
As at 30 June 2020, Donaco's pro forma post raise cash at bank and on deposit was A$26.7 million.
To view the full quarterly report, please visit:
https://abnnewswire.net/lnk/06FU9233
About Donaco International Ltd
Donaco International Limited (ASX:DNA) operates leisure, entertainment and associated technology businesses across the Asia Pacific region.
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.
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