GGRAsia – Donaco posts annual loss for fiscal 2015

Donaco posts annual loss for fiscal 2015

Aug 27, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Asian casino operator Donaco International Ltd posted a loss of AUD2.21 million (US$1.58 million) – excluding non-recurring items – for the 12 months to June 30, compared to a net profit of AUD7.93 million for the prior-year period. Including non-recurring items, the fiscal 2015 loss was approximately AUD2.93 million, the firm said in a filing to the Australian Securities Exchange on Thursday.

Donaco said its normalised profit in the fiscal year to June 30 fell 4.9 percent year-on-year, when excluding non-recurring items. Such normalised profit was AUD8.26 million, compared to approximately AUD8.69 million in fiscal year 2014. When non-recurring items are included, normalised profit was flat year-on-year, at AUD7.54 million.

Donaco’s normalised results adjust the revenue the company receives from its VIP table games business by applying a theoretical house win rate of 2.85 percent to VIP rolling chip turnover.

No dividend was recommended or paid for the reporting period.

The fiscal 2015 results cover only operations at Aristo International Hotel (pictured), a casino hotel property in northern Vietnam, near that country’s border with China. Aristo International accounted for approximately 15 percent of the company’s overall business in the period, judged by net revenue, it said.

Donaco concluded in July – outside the reporting period – the acquisition of a casino property in Poipet, Cambodia, called Star Vegas Resort and Club, for a consideration of US$360 million.

The company said its fiscal 2015 results relating to the Vietnam property were “adversely affected” in the first half by a travel warning by China to its citizens regarding Vietnam; by the FIFA World Cup soccer tournament which concluded in July 2014; and by an earthquake in what Donaco described as Aristo International’s “main target market”, China’s Yunnan province. It added that the Vietnam property was also in what it termed “soft opening mode” for a period to November 2014 – with not all facilities open – following a refurbishment.

During the reporting period, revenue from Donaco’s continuing operations fell 12 percent year-on-year, to nearly AUD17.07 million, from just over AUD19.47 million. On a normalised basis, revenue for the period rose 51.5 percent year-on-year, to nearly AUD30.80 million.

Cost of the group’s sales also rose – by 74 percent – to approximately AUD2.21 million, from AUD1.27 million in the year-prior period.

“Our Aristo property is back on track in recent months, after a difficult first year. Record levels of visitation and strong turnover figures give us confidence in the performance of this business for the coming year,” Donaco’s managing director Joey Lim Keong Yew said in a separate statement.

He added: “The new financial year has begun on a very bright note for Donaco. Our Star Vegas property has demonstrated the power of its diversified revenue streams, with rapid growth in turnover and revenue over the past 12 months. This strong business growth has continued into July and August to date.”

Donaco last week announced an agreement with Macau VIP gaming promoter Heng Sheng Group to bring high rollers to Star Vegas Resort and Club in Cambodia. The deal between Donaco and Heng Sheng Group could produce as much as US$29 million per year in additional gross gaming revenue at Star Vegas Resort, said a note on Friday from Union Gaming Securities Asia Ltd.