Donaco International has said that with minimum profits for the three months to September 30, the long path to its recovery begins from its loss of AU$ 2.7 million ( US$ 1.9 million).
In compliance with the Cambodian government mandating the temporary closure of all casinos, gaming revenue at Star Vegas dropped 45 percent due to the closure of the casino on April 1 2020. Due to intensified competition at Poipet and the rise of illegal gambling affecting the entire industry, VIP turnover declined by 45 percent. The new management introduced improved junket and slot benefit sharing agreements, but these were offset by lower visits and turnover.
In compliance with the Vietnamese government mandating the temporary closure of all casinos, Aristo was also closed on 1 April 2020, and was allowed to reopen on 8 May 2020. However, the casino served on a limited basis through the remainder of FY20 as the border with China is still closed. The effect of COVID-19 on the FY20 outcome was somewhat mitigated as Aristo delivered a good result for the first half of FY20, with net gaming revenue up 42 percent and EBITDA up 71 percent compared to the previous corresponding era.
Chairman Paul Porntat Amatavivadhana, said: “Encouragingly, we are seeing the early signs of improved operational and financial performance as both the Cambodian and Vietnamese governments allowed the reopening of casino operations.
“Whilst we are disappointed to present another significant loss at the statutory level as we seek to resolve the litigation issues with the vendor of Star Vegas, nonetheless, we are encouraged that despite the disruption, both our venues continued to produce positive cash flows.
“Our financial position continues to remain solid with further debt reduction, and improved terms and covenants were secured for our Mega Bank debt. The board’s main priority will be to set the course for the Company to pursue its operations under COVID19 and the new business norms successfully.”
Lee Bug Huy, Group Chief Executive Officer, said: “Despite difficulties during the year under the COVID-19 pandemic, the business still had a profitable baseline performance before the closing of the borders between Cambodia and Thailand. I am optimistic about the improvements that can be made in the coming years.
“We now have the opportunity to rework our gaming machine arrangements, utilise our ample space to introduce retail outlets, and to restructure our arrangements with junket operators for improved outcomes.
“In Vietnam, Aristo’s operation was also affected by the border closure between China and Vietnam under the COVID-19 pandemic. Whilst the full year results reflect the impact of the COVID-19 pandemic, the Aristo operations had been resumed on a limited level and we are expecting a better performance after the reopening of the borders which is expected to occur in the second half of CY2020.
“The Group is optimistic that the COVID-19 situation will continue to improve in the region in which the casinos operate and the reopening of the casino is a positive step towards the resumption of normal operations.”