Donaco International Ltd, an operator of border casinos in Southeast Asia, says it has returned to positive earnings before interest, taxation, depreciation and amortisation (EBITDA) in October and November. The firm added in a Friday filing to the Australian Securities Exchange that the positive trend of “growing” EBITDA was “continuing into December”.
Donaco said it recorded group EBITDA of US$0.54 million in October, followed by US$0.8 million in November.
The firm said the negative impact of Covid-19 on its casino business had begun to “subside”.
Donaco operates two casino properties in Asia: Star Vegas Resort and Club (pictured), a casino resort on Cambodia’s border with Thailand; and Aristo International, in Lao Cai on Vietnam’s border with China.
Star Vegas was closed on a temporary basis from April 1, as part of Cambodia’s Covid-19 countermeasures. It reopened on September 25. “Since its limited reopening, Star Vegas is no longer making a loss,” Donaco stated on its latest filing.
The company said the positive EBITDA results for October and November were “driven by business initiatives implemented by the new board and executive team”, appointed earlier this year following changes in the company’s shareholder structure. Measures included “a shift in customer targeting, with a renewed focus on attracting clientele from the local region to Star Vegas, to in turn reduce the company’s international staff expenses and provide a solid platform for growth.”
Donaco said the positive EBITDA in October and November was also a result of “continued cost control strategy”.
The firm stated the “gradual easing of Covid-19 restrictions” in the jurisdictions the company operates in had “improved the position of the business”. Donaco said its casinos, which are “still running on a limited basis”, were “ready to resume to full operations as the situation ameliorates”.
In its Friday filing, Donaco also detailed the status of ongoing discussions with Taiwan lender Mega International Commercial Bank Co Ltd. The casino promoter said it “remained confident in securing Mega Bank approval for a waiver on the settlement of all legal cases” with a Thai party – the latter party has meanwhile become a significant shareholder in Donaco following the latest changes in the firm’s shareholder structure.
Donaco said it “continued paying down of debt with Mega Bank”. The firm said the company was “currently on track” to pay down all remaining outstanding debt – amounting to US$7.8 million – in fiscal year 2021”.
On September 1, Donaco said in a filing it had significantly narrowed its fiscal-year loss as of June 30, to just above AUD58.9 million (US$41.6 million), from AUD198.0 million a year earlier, even though the second half of the reporting period was affected by Covid-19.
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