Australia-listed casino operator Donaco International Ltd reported statutory net profit after tax of AUD31.0 million (US$24.6 million) in the 12 months to June 30, 2017. In the prior year, the firm recorded net profit after tax of AUD78.7-million.
“The prior period included net non-recurring items of positive AUD24.1 million,” relating to the revaluation of the Star Vegas Resort and Club (pictured), Donaco said in a filing to the Australian Securities Exchange on Tuesday. The firm added that the latest fiscal year included “a net negative contribution of AUD23.6 million of non-recurring items”.
The company said that its underlying net profit after tax in the latest fiscal year – excluding non-recurring items – was AUD54.6 million, “in line with AUD54.6 million in the prior comparable period”.
Donaco operates two casino properties, the Aristo International Hotel in Vietnam and Star Vegas in Cambodia – border properties targeting gamblers from respectively, China and Thailand.
The casino firm reported group revenue of AUD136.4 million for the latest financial year, down 4.8 percent from the prior-year period. Donaco reported group earnings before interest, taxation, depreciation and amortisation (EBITDA) of AUD65.3 million, an increase of 17.7 percent from the previous fiscal year.
Net gaming revenue at Aristo International was up 36.3 percent year-on-year, to AUD15.6 million. VIP turnover at the property increased by 8.6 percent to RMB9.04 billion (US$1.37 billion).
The casino operator said Aristo’s performance was boosted by an 18-percent increase in number of visitors to the property “due to successful marketing initiatives to target mass-market and premium players”.
Net gaming revenue at Star Vegas during the 12 months to June 30, 2017 was down 8.2 percent year-on-year, to approximately AUD104.5 million. VIP turnover at the property fell by 19.5 percent, to approximately THB94.53 billion (US$2.85 billion).
Star Vegas recorded gross gaming revenue of THB3.85 billion for the fiscal year, down 9.5 percent from a year earlier. The firm said the property recorded a VIP gross win rate of 3.54 percent, up from 3.16 percent in the previous year.
Donaco said in Tuesday’s filing that Star Vegas’ results were negatively impacted by a “reduction in visitation and turnover” following the death of Thailand’s King Bhumibol Adulyadej in October last year.
The company said in July that it would be adding approximately 100 gaming tables to Star Vegas in the coming months. The expansion of the gaming floor is the result of a deal with a marketing firm to bring new junket operators to the property.
“Fiscal year 2017 was a busy year for Donaco, as we laid the foundations for the transition to full management control of Star Vegas, and launched a number of international marketing initiatives,” said Joey Lim Keong Yew, Donaco’s chief executive, in a prepared statement included in Tuesday’s filing.
He added: “All key management appointments at Star Vegas have now been made, and we are implementing new marketing initiatives to attract new junkets and additional players to the venue … we have already engaged a number of new Thai junket operators after assuming management control of Star Vegas on 1 July 2017.”
Mr Lim additionally said that more junkets would start working with Star Vegas in September.
“Some of our new junket customers will commence offering online gaming in September 2017, as new facilities are built out,” said Donaco’s CEO.
He added: “We have brought in a number of professional third party operators to build new entertainment facilities [at Star Vegas], at their own cost, for our VIP guests. The new facilities include a nightclub, karaoke rooms and a new café, which are planned to open in September and will help to generate additional visitation to the property.”
On Tuesday, Donaco also announced that Kenny Bee Meng Chuan has been appointed as general manager of Star Vegas. Mr Bee was described in the filing as having previously worked at Wynn Macau and for the Genting Group. The firm additionally said that its deputy CEO and chief operating officer Att Asavanund would leave the company on August 31, “as part of the management transition”.
On Tuesday, the company announced that it was issuing a dividend – amounting to AUD0.05 per share – payable on October 20.
Donaco additionally said that it would implement a new dividend policy of paying out anywhere between 10 percent and 30 percent of its net profit after tax, in likelihood via regular half-yearly dividend payments. It also announced an on-market share buy-back programme, scheduled to begin in October this year.
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Vitaly Umansky, Eunice Lee and Kelsey Zhu
Sanford Bernstein analysts