With Star Vegas still temporarily closed in Cambodia and Aristo open in Vietnam on a limited basis due to COVID-19 related restrictions, Donaco International has declared a cash burn of USD$380,408 per month, which it says is ‘well within the targeted range.’
Increasing vaccination rates in Thailand and Cambodia have led both countries’ Governments to target the easing of travel restrictions during the December 2021 quarter. The group has reported revenue of A$7.6m (September 2020: A$0.3m), stemming from operational inactivity due to COVID-19 restrictions. It said ti has proactively reduced balance of Mega Bank Facility to USD$3.8m, with Donaco remaining on track to make final debt payment in December 2021.
Donaco said it ‘remains focused on preserving its balance sheet and operational capabilities amid the ongoing COVID19 pandemic and the subsequent effects on the company’s casinos.’
It added: “As a result of government-mandated restrictions, the Star Vegas casino in Cambodia has been temporarily closed since 27 April 2021, until further notice, and the Aristo casino in Vietnam has been operating on a limited basis since May 2020. The ongoing restrictions have heavily reduced visitation numbers, affecting revenue and EBITDA, and resulting in Group revenue of A$7.6m and negative EBITDA of A$0.3m. However, the Governments of Thailand and Cambodia have both outlined significant reopening plans during the December 2021 quarter.”
The Thailand Government is set to commence quarantine-free entry and departure for vaccinated people to and
from selected countries, including Cambodia, from next month. Earlier this month, the Cambodian Prime Minister stated that the Government is targeting the reopening of the ‘economy and society across all sectors’ , next month. Additionally, earlier this month the Cambodian Government reopened e-visa applications for international travellers coming into Cambodia.
The company added: “A continued strong emphasis has been maintained on prudent cost control measures and ensuring a robust balance sheet, with a reduction in cash burn to A$0.4m, compared to $0.7m in the prior corresponding quarter. In the June 2020 quarter trading update, Donaco set a monthly target cash burn rate from maintaining the casino assets and associated corporate costs, amid the effects of COVID-19 impacts, of approximately USD$800,000 to USD$900,000. The September 2021 quarter result was better than the targeted range, with a cash burn of approximately USD$380,408 per month during the quarter.
Non-Executive Chairman of Donaco, Mr Porntat Porntat, commented: “This was another challenging quarter for Donaco as the impacts of COVID-19 continued to linger on our casinos and the broader communities where we operate. During the quarter we focused on positioning the Company optimally to target significant growth once the
external conditions improve; by proactively reducing our Mega Bank debt to preserve a robust balance sheet
and maintaining prudent cost control.
“There are positive indications that COVID restrictions relevant to the region Star Vegas operates in will
ameliorate in the near-term, with the Governments of Thailand and Cambodia both outlining reopening plans
following strong vaccination rates in the two countries. Vaccination rates in Vietnam have also been starting to ramp up substantially since September, which is a highly positive sign for our Aristo casino,” he added.
“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. I would like to again thank our shareholders for their loyalty and patience during this period.”