After-tax normalised profit for Australia-listed casino operator Donaco International Ltd fell 1 percent year-on-year in the half-year to December 31, to AUD2.48 million (US$1.94 million) once one-off gains from a business unit disposal were excluded.
Actual profit however dropped by 74.8 percent year-on-year, to AUD746,000, excluding one-off gains.
The firm operates a single casino called Aristo International Hotel (pictured) in Lao Cai, near Vietnam’s northern border with China, but is in the process of acquiring a second casino property in Poipet, in neighbouring Cambodia, for a consideration of US$360 million.
Donaco’s normalised half-year results showed revenue growth for the period of 55 percent, and earnings before interest, taxation, depreciation, and amortisation (EBITDA) growth of 52 percent, “driven by the soft opening of the Aristo International Hotel in May 2014,” stated the firm in an earnings report on Thursday.
Actual revenue from ordinary activities however dropped by 11.9 percent year-on-year.
The process of normalising the results assumed a theoretical house win rate of 2.85 percent for all table game turnover, added Donaco.
“Normalised results provides a more accurate guide to the underlying operating performance of the VIP table games business, which can experience significant volatility over shorter periods,” stated the firm.
Donaco had a AUD2.2 million one-off gain during the reporting period from the disposal of a gaming technology business.
The firm added it experienced a 13 percent increase in table games turnover during the reporting period, with a normalised tally of AUD9.04 million.
“The most rapid growth was experienced in slot machines, with turnover up 746 percent and gross revenue up 665 percent during the half,” the company said in a filing to the Australian Securities Exchange. “This reflects an increase in the quality and quantity of machines, with 58 new machines replacing 36 older ones. The 58 machines in the Aristo consist of 36 linked jackpot machines, and three electronic roulette tables with eight seats each,” added Donaco.
Trading during Aristo’s soft opening period – which continued until November last year – was “impacted by a number of headwinds” said the operator, including “China-Vietnam tensions, the soccer World Cup in June and July, and a severe earthquake in Yunnan Province in August”.
A significant positive event for the business during the period was receiving in November its five-star hotel certification from the Vietnamese authorities.
Also on Thursday, in events outside the reporting period, Donaco said it had raised an aggregate of AUD117.3 million from two share entitlement exercises – one for institutions and one for retail investors. It is part of a US$100 million equity financing package toward the deal for the Star Vegas Resort and Club casino property in Poipet.
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