GGRAsia – Donaco back to annual profit, flags Thailand risk

Donaco back to annual profit, flags Thailand risk

Aug 30, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck

Donaco International Ltd, an operator of several border casinos in Southeast Asia, returned to profit in the financial year to June 30, it said in a Friday filing to the Australian Securities Exchange.

Profit attributable to the owners was just under AUD37.1 million (US$25.2 million), versus a AUD36.7 million loss in the financial year ending June 2023.

Donaco runs the DNA Star Vegas resort (pictured in a file photo) at Poipet, on Cambodia’s border with Thailand, and the Aristo International Hotel at Lao Cai, near Vietnam’s border with China.

The group’s net revenue for the year to June 30 was just over AUD39.5 million, up 62.5 percent from a year earlier.

Group earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD22.2 million, up 130.9 percent from the prior-year period.

The firm stated in commentary: “DNA Star Vegas… and Aristo International… experienced significant growth over the past 12 months following prudent financial management.”

It added that Star Vegas delivered net revenue of nearly AUD25.7 million in the period, up 28.9 percent on the prior year. The property’s earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD16.67 million, a 54.1 percent improvement from a year earlier.

“Star Vegas recorded a substantial uplift in non-gaming revenue; while average daily visitation remained stable compared to the prior year,” said Donaco.

Aristo’s revenue improved 214.9 percent year-on-year, to nearly AUD13.9 million. Its EBITDA leapt 453.5 percent, to AUD8.4 million.

Amid the improvements, no dividends were paid for the year ended June 30, noted the firm.

Donaco’s non-executive chairman, Porntat Amatavivadhana, acknowledged the potential for a longer-term competitive threat to DNA Star Vegas’ border trade, if Thailand legalises casino resort business.

He stated: “While we are very pleased by the latest results and remain committed to executing our strategy, we are currently evaluating potential disruptors such as the proposed Integrated Entertainment Business Act in Thailand and the separate Aristo tax audit, as we navigate Southeast Asia’s evolving gaming landscape.”

In a July update, Donaco had noted Aristo was subject to an ongoing “tax audit of unredeemed” gaming chips – the chips that patrons deposited at the property – that Vietam’s tax authority has declared should count as revenue for the group.

“This could amount to a potential tax payment of approximately US$5.9 million,” the group mentioned.

It noted in its Friday filing: “In July 2024, the Aristo tax appeal application was rejected by the General Department of Taxation, and Aristo has engaged a consultant to pursue further appeal with the People’s Court of Hanoi City in early September. This may potentially have an impact on Donaco’s financials.”