Net revenue at DNA Star Vegas, a Cambodia casino at Poipet near the frontier with Thailand, fell 31.4 percent sequentially in the three months to June 30, at AUD4.31 million (US$2.81 million).
Property level earnings before interest, taxation, depreciation and amortisation (EBITDA) went down 48.9 percent quarter-on-quarter, to AUD1.78 million.
Both performances were “following a border dispute in the region,” said the property’s promoter, Australian Securities Exchange-listed Donaco International Ltd, in a Wednesday filing.
As of Tuesday, a ceasefire in effect since midnight on Monday had been reportedly holding between Cambodia and Thailand. That followed five days of clashes between the two nation’s armed forces in disputed zones along their 800-kilometre (500-mile) border. At least 38 people were killed, and circa 300,000 people displaced, according to news outlets.
Donaco stated that as “previously disclosed” in a June filing, the company’s performance was “impacted by increased tensions along the border between Thailand and Cambodia”.
The firm added in its latest update: “This included a border closure to nearly all travellers, which has directly affected visitation at Star Vegas.
“Star Vegas’ operations remain at reduced activity following border tensions, with its primary customers, who were travelling from Thailand before the border restrictions, unable to cross the border.”
The company further noted: “Since the border closure, the Star Vegas customer base has consisted of foreigners in Poipet, primarily expatriates and businesspeople from Indonesia, China, and [South] Korea.”
Porntat Amatavivadhana, Donaco’s non-executive chairman, stated in Wednesday’s filing: “As the border dispute is ongoing and subject to rapid change, the short-term outlook for tourism in the region remains uncertain. However, we will continue to closely monitor the situation.”
For the June quarter, Donaco – which also runs the Aristo International Hotel, a casino property on Vietnam’s border with China – reported group net revenue of AUD8.47 million, down 15.6 percent from March quarter’s AUD10.03 million; and EBITDA of AUD3.68 million, a drop of 10.2 percent versus the March quarter’s AUD4.10 million.
Aristo International Hotel at Lao Cai, in Vietnam, delivered revenue of AUD4.16 million, up 10.9 percent quarter-on-quarter; and property-level EBITDA of AUD2.52 million, a sequential gain of 9.1 percent.
The Donaco non-executive chairman stated: “Aristo has continued to perform in line with previous quarters, with stable revenue growth and improved EBITDA. Visitation numbers also slightly improved over the quarter, following an increase in tourism to the region.”
The parent firm held AUD39.63 million in cash as of June 30.
Donaco also gave an update on a deal – announced in March – whereby an entity called On Nut Road Ltd will acquire 100 percent of the shares in Donaco that it does not already own.
A meeting regarding the so-called scheme of arrangement will be held on August 4.
Donaco’s non-executive chairman was cited as saying in Wednesday’s update: “The board continues to unanimously recommend that Donaco shareholders vote in favour of the scheme at the upcoming scheme meeting.”
This was “in the absence of a superior proposal and subject to an independent expert concluding – and continuing to conclude – that the scheme is in the best interests of Donaco shareholders”.
