Quarterly Activities - Cashflow Report
Sydney, Jan 29, 2021 AEST (ABN Newswire) - Donaco International Limited (
ASX:DNA) (UGS:FRA) provides the following trading update for the three-month period ending 31 December 2020.
Since the reopening of the Star Vegas Resort and Club ('Star Vegas') in Cambodia in late September, and the Aristo International Hotel ('Aristo') in Vietnam, the December quarter was a turnaround period for Donaco with a return to positive EBITDA of A$3.70m and negative EBITDA of A$0.13m respectively, resulting in positive EBITDA of A$3.57m for the overall group.
The result was driven by a number of strategic initiatives executed by the new Board and Executive team to weather the impact from the pandemic, including a shift in customer targeting, with a renewed focus on attracting clientele from the local region to Star Vegas, to in turn reduce international staff expenses. This was combined with a continued cost control strategy, including the adjustment of service provider agreements, restructuring arrangements with gaming machines and junket operators and the introduction of retail outlets.
In tandem with these initiatives, the gradual easing of COVID-19 restrictions in the region has improved the position of the business, and the casinos have operated flexibly as conditions dictate. Donaco's strategy for CY21 will build on these pragmatic initiatives, underpinned by a strengthened balance sheet and cost control strategy.
The Company is also pleased that the dispute surrounding the Star Vegas casino has now formally concluded. This follows the approval from Mega Bank announced on 22 December 2020. In addition to earnings from operations, Donaco recorded A$52.6m (equivalent to USD$38m) other-income from the settlement, this is a non-cash item. The accounts for the Half Year Ending 31 December 2020 will fully reflect the net positive outcome of A$48.4m (equivalent to USD$35m) in accordance to the terms of the settlement.
Donaco continues to carry its work with Mega Bank to pay down its debt facility under the agreement, which as at 31 December 2020 decreased by A$6.5m (equivalent to US$5m). The outstanding debt of A$10.1m (equivalent to US$7.8m) is a significant reduction from the initially borrowed amount of A$129.8m (equivalent of USD$100m), and the Company anticipates repaying the remaining debt in FY21.
Non-Executive Chairman Porntat Amatavivadhana said: "The December quarter was a turnaround period for Donaco with a return to positive EBITDA. We are extremely encouraged that since the casinos' limited reopening, Star Vegas is no longer making a loss and the outlook for Aristo is increasingly positive."
"Our strategy is bearing results, underpinned by targeting clientele from the local region, whilst keeping tight control over our costs following the revision of some service provider agreements. We are also experiencing a gradual easing of COVID-19 restrictions across South East Asia and the situation is expected to ameliorate.
"Our strategy for 2021 will build on these pragmatic initiatives, underpinned by a strengthened balance sheet as the performance from Star Vegas and Aristo continues to improve and provides a solid platform for growth.
"The reduction of our debt level also offers us some clear air as we explore additional options to access the gaming sector, and take advantage of this growing market."
To view the quarterly report, please visit:
https://abnnewswire.net/lnk/28LU98TJ
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.
| ||
|
