GGRAsia – Donaco 1H Cambodia revenue up, post-tax loss US$25mln

Donaco 1H Cambodia revenue up, post-tax loss US$25mln

Mar 01, 2023 Newsdesk Latest News, Rest of Asia, Top of the deck

Financial first-half revenue for Cambodia-border casino operations at Donaco International Ltd leapt year-on-year, coinciding with resumed business at DNA Star Vegas in Poipet relative to the same period of 2021.

Nonetheless, the firm – which also has a business in Vietnam – reported a post-income tax loss of AUD36.7 million (US$24.7 million) for the six months to December 31, versus a nearly AUD8.9 million after-tax loss a year earlier, it stated in a Tuesday filing to the Australian Securities Exchange.

Cambodia casino revenue was nearly AUD9.3 million (US$6.2 million) for the six months to December 31, compared to only AUD73,341 in the prior-year period, coinciding with gaming being paused on the order of the authorities, as a Covid-19 countermeasure.

The company’s balance sheet encompassed “taxation fines and penalties” amounting to nearly AUD9.0 million, imposed by the Vietnamese authorities in relation to the group’s Aristo International Hotel (pictured) gaming business at Lao Cai on Vietnam’s border with China. The firm said it had lodged an appeal against that liability, but had nonetheless booked it for the latest results.

Donaco said the tax liability related to a January decision by Vietnam’s General Department of Taxation “primarily associated with the determination of tax payable for floating chips, with a total amount of approximately VND149.3 billion – approximately AUD9.4 million as at December 31, 2022 spot rate”. The claim followed an inspection by the authorities covering the fiscal years 2019, 2020 and 2021.

Donaco also had a AUD22.2-million impairment in Vietnam operations, on “intangible asset and property, plant and equipment and construction in progress,” for the six months to December 31. Most of the impairment, i.e., AUD18.2 million, related to “leasehold buildings and structures”. The Cambodia business had a AUD4.4 million impairment in the reporting period.

The group’s non-executive chairman, Porntat Amatavivadhana, was cited saying in a press release accompanying the results, that “despite taking a conservative approach to the carrying value of the casinos, we have a strong operational base”.

In Vietnam, Donaco’s first-half casino revenue was down 40.1 percent year-on-year, at AUD632,470 versus nearly AUD1.1 million a year earlier.

Aristo business via China “remained heavily restricted during the period as a result of residual Covid-19 measures,” said the firm.

Though it added: “The situation is due to improve as mainland China announced the full reopening of its borders and travel flow from January 2023.”

Group-wide earnings before interest, taxation, depreciation and amortisation (EBITDA) for the six months to December 31 were positive by nearly AUD3.3 million, versus negative by just under AUD2.3 million in the prior-year period.

The company said it remained committed to “disciplined cost control,” noting that as of December 31, it had a “healthy” cash position amounting to AUD9.3 million.

No dividends were paid for the half-year ended December 31, 2022.