Net profit after tax at boutique Asian casino operator Donaco International Ltd rose 5 percent year-on-year in the six months to December 31.
That was despite group revenue slipping 14.4 percent; and earnings before interest, taxation, depreciation and amortisation (EBITDA) contracting by 14.8 percent year-on-year in the first-half fiscal.
Such net profit was AUD14.8 million (US$11.4 million) compared to AUD14.1 million in the prior-year period.
Group EBITDA was AUD33.3 million compared to AUD39.1 million in the previous corresponding period.
A reduction in expenses during the reporting period contributed to the profit improvement. Professional and consultants’ fees fell to AUD1.05 million, compared to nearly AUD12.3 million in the prior-year reporting period, according to the balance sheet of the company.
Australian Securities Exchange-listed Donaco has found a niche running casinos in Vietnam and Cambodia that mostly serve customers from some neighbouring Asian countries that either severely restrict or ban entirely access to casino gambling.
Donaco started operations with a single casino property called the Aristo International Hotel in Lao Cai, near Vietnam’s border with Yunnan province in China.
In 2015 Donaco acquired Star Vegas (pictured) – a casino venue located in Poipet, Cambodia, on the latter country’s border with Thailand. In autumn 2016, Donaco said it had started managing – for a monthly fee – gaming operations at Star Paradise, a property neighbouring Star Vegas.
Group revenue in first-half fiscal was AUD59 million compared to AUD68.9 million in the prior-year period. The firm said that was mainly due to: a lower VIP win rate at Star Vegas; lower VIP turnover at Star Vegas; and the strengthening of the Australian dollar against local currencies.
Joey Lim Keong Yew, chief executive of the group, said in commentary accompanying the results: “Star Vegas… faced difficult trading conditions with a weakening in the Thai economy and in Thai consumer sentiment, following the passing of the late King of Thailand. We also had one less VIP event in the period, with other events cancelled due to the late King’s passing, leading to a reduction in patronage and turnover during the period.”
Mr Lim also referred in the results to the January announcement by the Vietnamese government that it would allow economically qualified Vietnamese citizens to gamble at some large-scale casino venues in Vietnam during a trial three-year period.
“This could provide potential growth options for Donaco into the future, as one of the pioneers of casino gaming in Vietnam, and we will look to explore our options as the situation develops,” said Mr Lim.
Relative to the reporting period, the company paid a dividend of AUD0.01 per ordinary share on October 19, 2016, to shareholders registered as of October 4 that year.
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Direct taxes on gaming collected by the Macau government in full calendar year 2018