The last couple of years Donaco International has gone through some tough times, and will likely have some trouble going forward. The casino operator has just shared its latest financial report (in pdf) with the Australian Securities Exchange ( ASX), where it is listed, and has painted a rather grim picture of what has happened recently. Revenue had fallen by 95 percent year-on-year for the most recent quarter, which just wrapped up on June 30. Moreover, the company is now without a designated skipper as it is officially done by Paul Arbuckle as from tomorrow, August 4. He was just six months CEO at Donaco, and declared his departure last December.
Donaco’s filing with the ASX reveals that its quarterly revenue was right at US$ 642,000, which is well off the $14.45 million it posted last year for the same period. In comparison, the EBITDA (earnings before interest , taxes, depreciation and amortisation) plunged to -$2.13 million in red. On the positive side the number was $3.41 million a year ago.
The cause of the decline should be evident, because it is what has plagued the casino industry worldwide. Donaco explains: “The June quarter was significantly impacted by the onset of COVVID-19 and the resultant restrictions on casino operations and border closures. The closure of both DNA Star Vegas [in Cambodia] and Aristo International Hotel [in Vietnam] for an extended period of time has had a material impact on Donaco’s operations.”
Donaco is taking action to slash costs as a result of the downturn. It has cash and cash equivalents in its hands that amount about $9.11 million, and it wants to make sure it doesn’t have to spend more than it needs. Donaco explains that it is pursuing measures that place “heavy emphasis on tightly controlling and reducing costs and capital expenses” that it hopes will allow its current monthly burn rate of “about US$ 800,000 to US$ 900,000” to continue.
Not having a dedicated CEO could make things a little chaotic. Arbuckle has been on board regularly since last year’s announcement of his departure but no replacement has been named yet. In his ASX filing Donaco explains: “The CEO recruitment process is ongoing. The board has interviewed a number of quality candidates,” adding that they are “currently under consideration.”
Donaco submitted a new filing to the ASX this morning, stating it had successfully completed a stock placement it announced last week (in pdf). It sold a total of 1,235,389,382 units at $0.025 each, for a total of just over $30.88 million which it plans to use for working capital, according to the report (in pdf).