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Cambodia – Reopening of Star Vegas boosts Donaco but EBIDTA slips in June

By - 1 August 2022

Vietnamese and Cambodian casino operator Donaco International Limited said for the three-month period ending 30 June 2022, group revenue came in at A$1.1m, down from A$1.5m a year earlier and negative EBITDA of A$0.8m.

Star Vegas Resort & Club (Star Vegas) resumed operations on 18 June 2022 following the Government of
Cambodia lifting the temporary closure of casinos in the Banteay Meanchey province, where Star Vegas is
located. The casino had been closed from 27 April 2021.

Operations at Star Vegas have recommenced on a limited scale, with the Company positioned to progressively
advance towards full scale activities over the coming months. Encouragingly, the Cambodian border with
Thailand has also reopened, which has traditionally been where the vast majority of Star Vegas’ customers
originate from.

Meanwhile, Aristo International Hotel (Aristo) in Vietnam, operating on a limited basis since 8 May 2020, was
recently acknowledged as the only 5-star hotel in Lao Cai, province of Vietnam, by the Lao Cai Ministry of Culture,
Sports and Tourism. The recognition is for a period of 5 years and presents a major opportunity to attract new
customers in the long term as the construction of the new Sapa airport in Lao Cai, with a capacity of 1.5 million
passengers per year, is underway.

The June Quarter remained a challenging period for the Company as the effects of the COVID-19 pandemic on
the casinos persisted as international travelling remained minimal.

The company has continued to carry out rigorous measures to preserve cash and protect its balance sheet. To
this extent, the Board approved a loan facility for US$5m from Mr Lee Bug Huy, aka Techatut
Sukcharoenkraisri, CEO and Executive Director of Donaco. The loan was judged as the best source of funding to
guarantee the Company remains in a sustainable position while operations are limited and to assist in the
transition towards full operational capacity.

The monthly cash burn rate has also been kept within the targeted range. Donaco is confident in the broader outlook as borders with foreign countries continue to relax, and conditions ease in line with the ramp-up in vaccinations.
Infection rates are decreasing in Vietnam and the country is experiencing an initial flow of tourists following the
lifting of most COVID-19 travel restrictions. The international tourism market will experience a slower recovery
as its key market China and South Korea are yet to fully reopen their tourism industries. Vietnam targets 5 million
foreign arrivals this year, around 30% of 2019 when their numbers had reached record levels.1
Meanwhile, the Thai Government has also removed restrictions for international travellers, resulting in a steady
increase in visitor numbers. The Government estimates between 5 and 15 million international travellers this
year, a large increase from last year’s 428,000 foreign arrivals but far from the nearly 40 million tourists who
arrived in 2019.

Donaco’s Non-Executive Chairman, Mr Porntat Amatavivadhana, commented: “The highlight of the Quarter was the reopening of Star Vegas with the goal to return to full-scale operations as conditions improve. It will take some time before activities return to how they were before, but these external factors are a huge step forward.

“With our business slowly resuming and with the loan facility under our belt, we are in a stable position to
protect the balance sheet. We are optimistic about Donaco’s future as vaccination rates and international travel
patterns continue to improve. As always, I would like to sincerely thank you, our shareholders, for your patience and loyalty.”

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