Indochina casino operator Donaco International Ltd has made “operational improvements” in the three months ending September 30, that are already resulting in “improved financial performance”.
So said Paul Arbuckle, the recently-appointed group chief executive in comments prefacing Donaco’s report for financial year ending June 30, filed last week with the Australian Securities Exchange.
Mr Arbuckle accepted in his comments to shareholders that for much of the financial year concerned – i.e., prior to his arrival in June – the group’s flagship venue, Star Vegas Resort and Club at Poipet in Cambodia, suffered from a “lack of senior casino management oversight”.
During the financial reporting period Donaco was roiled by several issues. They included its long-running dispute with the Thai people that sold the group the rights to run Star Vegas, and the extended leave of absence – for health reasons – of the then chief executive Joey Lim Keong Yew.
In March Mr Joey Lim was sacked as CEO, and in July he and his brother Ben Lim Keong Hoe were dropped as Donaco directors.
According to the annual report, new CEO Mr Arbuckle has 30 years of experience in the gaming industry. He is a former chief operating officer at Australian casino firm The Star Entertainment Group Ltd, and has had senior roles at Resorts World Sentosa, a Singapore casino resort developed and operated by Genting Singapore Ltd.
Mr Arbuckle said in his Donaco annual report remarks: “We are further strengthening senior management, and at Star Vegas we are pleased with the appointment of Mr P.H. Chow as executive general manager of electronic gaming operations, who joined us in September.”
The CEO added that Mr Chow had “extensive experience” in the Indochina market, having previously held the position of regional general manager for fellow Australia-listed casino firm Silver Heritage Group Ltd.
Mr Arbuckle stated: “He possesses very strong gaming machine product knowledge and analytical capabilities, and I look forward to a significant increase in gaming machine revenues and profitability under his leadership.”
Donaco’s annual loss attributable to shareholders widened by 56 percent year-on-year to nearly AUD194.0 million (US$130.9 million) in financial year ended June 30.
Vietnam operation
Mr Arbuckle observed in his commentary: “Despite the statutory loss recorded for the year, our financial position is sound overall, with low levels of debt. Although underperforming, both our businesses in Vietnam and Cambodia remain profitable.”
In Vietnam, the group runs the Aristo International Hotel and accompanying casino, which mainly serves players from neighbouring mainland China.
The CEO said of Star Vegas: “We have straightforward opportunities to rework our gaming machine arrangements, utilise our ample space to introduce retail outlets, and to restructure our arrangements with junket operators for improved outcomes.”
He added the group had “started work on these issues”. The effort included an intention to “revisit our lease arrangements” on slot machines at Star Vegas.
The group might “look at revising profit-share arrangements, or purchasing these machines outright”.
Mr Arbuckle acknowledged that in the Vietnam operation, the first half of the financial year to June 30 “was challenging for Aristo,” as it was affected by a “Chinese crime syndicate in July and August 2018… which threatened VIP junkets and customers on the Chinese side of the border and significantly impacted results in those months”.
The financial-year results from Aristo reflected “the disruptions that occurred in July and August 2018, but the operating performance has now fully recovered,” asserted the CEO.
“This provides a good baseline for us to look to improve performance, and our licence allows additional machines to be introduced. We have commenced assessing how we can take advantage of this opportunity over the next few years,” he added.
