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Cambodia – Revenues fall for Donaco with Star Vegas closed again

By - 30 July 2021

The latest wave of infections in Cambodia, forcing the temporary closure of Star Vegas, have seen Donaco International’s quarterly revenues fall to A$1.5m compared to March 2020 Quarter revenue of A$2.8m.

The ongoing outbreaks have heavily reduced visitation numbers, affecting revenue and EBITDA, and resulting in Group revenue of A$1.5m and negative EBITDA of A$0.5m.

Donaco is continuing its mitigation efforts following the recent outbreaks of COVID-19 in the regional area near Star Vegas. As a result of the latest wave of infections, Cambodian local authorities mandated the temporary closure of all casinos in the Banteay Meanchey province to prevent the curb in community outbreak, leading to the temporary closure of Star Vegas since 27 April 2021, until further notice.

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. A heavy emphasis has been kept on continued cost control measures and mitigation activities, resulting in the reduction in operating expenses to A$1.3m compared to the prior corresponding quarter.

Non-Executive Chairman of Donaco, Mr Paul Porntat, commented: “This hasn’t been an easy period for Donaco. The pandemic has impacted the industry as a whole, and society as a whole as a direct result of restrictions, and prioritising public health and the safety of our staff and visitors has remained a number one priority.

“Following the order from the Cambodian local government for the closure of casinos in the region to prevent community outbreak, including Star Vegas, we have continued to focus on protecting our balance sheet, and we’ve taken rigorous measures to protect the business by keeping our costs down and preserving our cash.

“Nonetheless, we are ready to bounce back once conditions improve as vaccinations are rolled out. As recently demonstrated, Donaco made a profit during the December quarter which was a remarkable achievement in the current circumstances, and this gives us confidence in our capabilities to bounce back once the situation recovers.

“Vaccinations will continue to be administered across Southeast Asia during the second half of the year to curb the virus and its new variant. In the meantime, we are well-equipped to meet the challenges we expect to face in the short term and we are ready to move forward once external conditions stabilise.

Donaco has been diligently repaying its debt facility with its principal lender Mega Bank from the initially borrowed amount of A$131.54m to the remaining sum of A$11.09m (USD$8.34m) as of 30 June 2021.

The Governments of Thailand and Cambodia are rolling out vaccinations in their respective countries to curb the latest Delta variant. The Thai Government has secured 150 million doses to minimise the risk of infection, with a total of more than 12 million vaccine doses administered to date, at a rate of 270,000 doses administered daily. Looking at Cambodia, the country was also recently hit by a wave of infections and early vaccinations have commenced. More than 8 million people have received the COVID-19 jab to date, and Cambodia is now second only to Singapore for the number of vaccinations it has provided in the region.

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