Donaco International reports H1 net loss of AU$59 million, showing significant year-on-year improvement
Asian casino giant Donaco International suffered a net loss of AU$59 million (US$43.5 million) in the twelve-month period ending June 30, mainly due to the COVID-19 pandemic that forced its properties to remain shuttered for several months.
The Australia-listed casino operator’s figure of net loss for the half of this year may seems to be discouraging, but it represents a significant improvement from fiscal 2019’s H1 net loss figure of AUS$198 million.
Group revenue slipped 38 per cent to AU$53.5 million, while earnings tumbled nearly two-thirds to AU$10.3million. Attributing the bulk of the net loss to a non-cash impairment charge of AU$50.5 million following downgrading in the value of the gaming license at its Poipet, Cambodia-based Star Vegas property, the operator said it took the hit due to the uncertainty surrounding its Star Vegas property that closed in April because of COVID-19 crisis and is still waiting for Cambodia’s permission to reopen.
It is worth-mentioning here that the Star Vegas Casino resort accounts for around 75 per cent of Donaco International’s operations. For the fiscal 2020, it reported revenue fall of 45 per cent year-on-year, while its profits slipped 63 per cent and net profit after tax dropped 54 per cent. VIP turnover tumbled 45 per cent because of increased competition in Poipet and the prevalence of unregulated gambling.
As the COVID-19 pandemic led to shutdown of all non-essential business in addition to the closure of the Cambodia-Thailand border, Star Vegas received 42 per cent fewer patrons during the last fiscal.
Donaco International’s years-long legal fight with Star Vegas’ former ‘Thai vendors’ also caused a dent in the company’s performance figures. The dispute was eventually resolved earlier this year after the company agreed to add one of the Thai vendors to its board. But, the legal action added AU$2 million to the company’s FY20 expenses.
In Vietnam, the company’s Aristo International Hotel, which is situated close to China’s southern border, reported a decline of 36.5 per cent in revenue to AU$13.7 million, while the property’s earnings slipped more than 50 per cent to AU$4.9 million and net profit tumbled 95 per cent.
The operator revealed no timeline for when Star Vegas Casino Resort might restart welcoming guests. It also declined to offer any guidance for FY21. It stressed that the reopening of the facility and the business operations in next fiscal would depend on the stabilization of the pandemic conditions.
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