GGRAsia – Star Vegas junket room meeting expectations: Donaco

Star Vegas junket room meeting expectations: Donaco

Nov 26, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

A high roller gambling room operated by Macau VIP gaming promoter Heng Sheng Group at a Cambodia border casino produced nearly AUD1 million (US$723,000) in revenue for the venue in its first full month of operation, it was announced on Thursday.

Joey Lim Keong Yew, managing director of Australia-listed casino operator Donaco International Ltd, gave the news to investors in a presentation at Donaco’s annual general meeting of shareholders.

Referring to the VIP room (pictured) at the Star Vegas Resort and Club casino in Poipet, Cambodia, Mr Lim said: “This [VIP room] business is in its infancy, having launched on 20 September, but is currently meeting expectations, with revenue for the company in its first full month of AUD941,000.”

Mr Lim added that rolling chip turnover at Star Vegas in October totalled AUD528 million.

The firm said in a follow up filing on Friday that the property’s VIP rolling chip turnover for the four months to October 31 this year was approximately AUD1.83 billion, a 53 percent rise on the AUD1.19 billion achieved in the equivalent period in 2014.

The Friday filing added that table game net revenue at Star Vegas for the four months to October 31 this year was approximately AUD26.8 million, a 41 percent increase on the nearly AUD19.0 million recorded in the prior-year period.

Slot machine net revenue at the Cambodian resort for the period was nearly AUD13.8 million, up 12 percent from the approximately AUD12.3 million in the equivalent four months in 2014.

Friday’s filing said total actual net revenue at Star Vegas in the four months to October 31 was AUD32.6 million, up 30 percent on the nearly AUD25.2 million recorded in the prior-year period. Property earnings before interest, taxation, depreciation and amortisation reached AUD32.64 million in the period, an increase of 30 percent on the nearly AUD25.2 million in the prior-year period.

The Friday filing corrected performance figures for Star Vegas quoted during the firm’s the annual meeting. They had erroneously compared the four months up to October 31, 2015, with the three months up to September 30, 2014.

Donaco completed the acquisition of Star Vegas, located near Cambodia’s border with Thailand, on July 1 for a consideration of US$360 million.

Mr Lim gave some commentary on Thursday about the firm’s other gaming property, the 400-room Aristo International Hotel in northern Vietnam which relaunched as a five-star property in May last year after a refurbishment.

He said that marketing strategies for Aristo were “focused on bringing in larger volumes of smaller players,” to counteract the “significant volatility in win rates” at the property caused by its past dependence on VIP players.

Mr Lim said that in October, Aristo – which is close to Vietnam’s border with the Chinese province of Yunnan – had set a new monthly record of 10,908 visitors, the tally swelled by the Golden Week national holiday in China.

In that month, Aristo’s gaming turnover grew by 30 percent year-on-year, although VIP gross win rate was 1.64 percent, “well below last year’s above-theoretical level of 4.01 percent,” said the executive.

“Despite this, total revenue at the Aristo for the October year to date is up by 41 percent compared to last year,” he stated.

Donaco’s chairman, Stuart McGregor, said during the annual meeting presentation that while the firm’s priority was to “pay down our debt”, it would give “serious consideration” to initiatives to reward shareholders, “including share buy-backs and dividends”.

According to a company filing in January to the Australian Securities Exchange, the deal to acquire Star Vegas included a commitment for up to US$100 million in new debt.

Mr McGregor noted: “The difficulties experienced by other gaming jurisdictions, notably Macau, do not have a negative impact on us. In fact they continue to open up opportunities for us, including increased interest from junket operators.”

The chairman stated that key senior management at Star Vegas and Aristo were “veterans from the Genting Group of companies,” meaning “operating procedures in place at both properties are well proven and effective”.

(Updated 5.30pm, Nov 27)