Southeast Asia casino operator Donaco International Ltd on Wednesday reported casino operating revenue of AUD68.8 million (US$49.5 million) for the six months to December 31, compared to AUD8.6 million in the prior-year period.
The Star Vegas Resort and Club casino (pictured) in Poipet, Cambodia, contributed with revenue of AUD55.5 million in the period, while the Aristo International Hotel, in Vietnam, recorded revenue of AUD13.4 million, Donaco said in a filing to the Australian Securities Exchange.
Donaco concluded in July the acquisition of Star Vegas for a consideration of US$360 million. The Aristo International Hotel – relaunched in May last year as a five-star property with 428 rooms – is located in northern Vietnam, near that country’s border with China.
Net profit for the fiscal first half reached AUD14.1 million, up from AUD745,927 a year earlier, the company said. Donaco reported earnings before interest, taxation, depreciation and amortisation (EBITDA) of AUD39.1 million for the six months to December 31.
The casino operator reported strong growth in rolling chip turnover at Star Vegas, up by 29 percent in year-on-year terms, reaching AUD2.4 billion. Such increase led to higher junket commissions, amounting to AUD55.6 million in the fiscal first half, it said.
Gross gaming revenue from tables at Star Vegas grew by 26 percent year-on-year to AUD83.4 million.
Donaco on Wednesday also announced that its exclusive deal with Macau VIP gaming promoter Heng Sheng Group has been terminated, with operations at the junket room suspended from January 2016.
The VIP room at Star Vegas was launched in September under a three-year deal between Donaco and Heng Sheng Group.
“These facilities will now be used for other international (non-Thai) junket operators,” said Donaco, adding that negotiations with other international junket operators “are well advanced”.
The firm said it expects the new junkets to start bringing in “significant numbers of new players in the coming months”.
Donaco additionally said it is planning to expand the gaming premises into the 240-room Star Paradise Hotel, adjacent to the Star Vegas casino. The company said the hotel has potential for a new gaming floor of about 2,260 square metres (24,326 sq feet) over two levels, with the options for expansion including lease deals and joint ventures.
“Such facilities would be used to accommodate demand from new Thai junkets and players,” said Donaco, adding that such operations are planned to start in the second quarter.
The casino firm said EBITDA at the Star Vegas for the six months ended December 31 was US$27.1 million, “due to investment in business growth”. The company said it expects EBITDA “to be stronger” in the fiscal second half.
On this basis however “the business is not currently on track to reach the EBITDA target of US$60 million for the full financial year 2016. Accordingly, the obligation to pay the management fee is inherently uncertain, as it will depend on whether or not the business reaches the target for the full year,” said Donaco.
In Vietnam, the Aristo casino hotel recorded gaming turnover of AUD1.0 billion, with gross gaming revenue of AUD28.5 million. Turnover grew by 38 percent on premium tables, as a result of a migration from both VIP and main hall tables, said the company.
Non-gaming revenue at the casino hotel reached AUD4.9 million, up by 16 percent from the prior-year period.
Donaco said that a revenue share deal with a “major” unnamed junket operator for VIP tables at Aristo started on January 1.
The company did not declare a first-half dividend. It said banking covenants prohibit it from declaring a dividend unless it gets consent from the lender. “These restrictions will be reduced once more than 50 percent of the outstanding loan is repaid,” it added.
