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Cambodia – Star Vegas and Aristo both nearing full operational capacity for Donaco

By - 31 July 2023

Donaco International has said it continued its operational turnaround strategy in the June quarter, with Group net revenue of A$6.9m and EBITDA of A$2.4m for the quarter.

Aristo, its casino in Vietnam, is nearing a return to full operations whilst Star Vegas in Cambodia is running stably after reaching full operational capacity in the March quarter.

With Aristo’s operational recovery now almost complete, Donaco will refine its focus on maximising
operational efficiencies across both its operations in the coming quarters.

At a Group level Donaco generated net revenue of A$6.88m, up from A$7.55m in the previous quarter and EBITDA of A$2.40m. There has been a substantial and sustained improvement since the June 2022 quarter, where Group EBITDA was negative A$0.8m and revenue of A$1.1m, which stemmed from limited activity due to COVID-19 restrictions. DNA Star Vegas (Star Vegas) in Cambodia produced net revenue of A$4.37m for the June 2023 quarter and EBITDA of A$1.81m. Star Vegas’ EBITDA result was impacted by an anomalous VIP win rate and non-recurring audit adjustments. This in conjunction with a renewed focus on maximising operational efficiencies moving forward has led Donaco to anticipate stronger earnings margins in the coming quarters.

The Aristo International Hotel in Vietnam grew its revenue to A$2.51m, up from A$1.26m in the earlier quarter and EBITDA to A$1.31m. A core focus for Donaco during the June quarter was to progress its gradual and methodical reopening of Aristo towards full operating capacity. Donaco commenced this reopening strategy in the March 2023 quarter after China, the country where the vast majority of Aristo’s patrons originate from, announced the full reopening of its borders with Vietnam in January this year.

Aristo is on track to reach full operational capacity in the current quarter. As of May 2023, China has been Vietnam’s fastest growing tourism market and numbers still remain below pre-COVID levels. Donaco is well positioned to capitalise on the latent tourism growth potential from China to Vietnam.

Donaco’s Non-Executive Chairman, Mr Porntat Amatavivadhana, commented: “The June quarter marked an important step for Donaco as we reach a return to full-scale operations. Pleasingly, the outlook for our business remains promising. Travel inflows from China to Vietnam are expected to continue to ramp-up and the Cambodian government recently launched a major tourism campaign to attract Thai visitors, which is highly encouraging for our Star Vegas casino.

“Backed by a healthy balance sheet and a clear line of sight towards enhanced operational efficiencies, we are well placed to capitalise on the emerging opportunities ahead and deliver long-term value for our shareholders.”

As previously mentioned, Chinese tourism inflows into Vietnam are on an upwards trajectory, which is set to benefit the Aristo operation that is situated in Vietnam near the Chinese border. The construction of Sapa airport in Lao Cai, the regional area where Aristo is located, is continuing to progress well and is envisaged to provide substantial economic potential for Donaco once opened in 2025. The airport is set to have an annual capacity of 1.5 million passengers. Additionally, late in the June quarter the Bank of Thailand and the National Bank of Cambodia launched phase two of their cross-border QR code payment system, designed to reduce the cost of currency exchange for visitors from Thailand to Cambodia and vice-versa. The initiative aims to facilitate additional cross-border tourism in the region, which is beneficial for Donaco’s Star Vegas casino located in Cambodia near the Thailand border.

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