Southeast Asian casino operator Donaco International Ltd has reported Group EBITDA of AU$4.07 million (US$2.7 million) in the three months to 31 March 2023, reversing an AU$1.37 million (US$905,000) loss in 1Q22 following the reopening of borders near its casinos in Cambodia and Vietnam.
The first quarter result was also 129% higher than in the December 2022 quarter, with net revenues of AU$7.55 million (US$5.0 million) comparing with AU$230,000 (US$152,000) a year earlier and AU$5.30 million (US$3.5 million) in 4Q22.
Leading the way in Q1 was Star Vegas in Poipet, Cambodia – located near the border with Thailand – which recorded net revenue of AU$6.29 million (US$4.2 million) and Property Level EBITDA of AU$4.17 million (US$2.8 million). Donaco said it has “swiftly leveraged on improving tourism conditions in the region where it operates, with visitor headcount increased in the quarter.”
At Aristo International Hotel, situated near Vietnam’s northern border with China, recovery was spurred by the easing of Chinese border restrictions in January which saw the average number of players each day reach 119 versus just 12 in 1Q22 and eight in 4Q22. Aa a result, net revenues climbed to AU$1.26 million (US$833,000) and Property Level EBITDA to AU$580,000 (US$383,000) – reversing an AU$180,000 (US$119,000) EBITDA loss a year earlier.
Notably, rolling chip VIP turnover at Aristo soared from just AU$6.61 million (US$4.4 million) in 1Q22 to AU$88.23 million (US$58.3 million), with only a low win rate keeping revenues subdued.
“As part of its strategy to attract VIP visitors, Aristo implemented a change to the minimum monthly turnover to qualify as an active junket,” Donaco explained. “The threshold was reduced from RMB 6 million ($868,000) to RMB 3 million (US$434,000), facilitating the return of junket operators and leading to the accelerated traction in VIP visitors.
“Additionally, Aristo began offering some complimentary services, such as room services and meals, to larger chip players in order to encourage player activity in the casino. This initiative proved successful in enhancing the overall guest experience and contributed positively to the company’s financial performance.”
Donaco’s Non-Executive Chairman, Mr Porntat Amatavivadhana, said, “The March quarter marks a significant turnaround for Donaco, with promising performance from DNA Star Vegas and early progress from the gradual reopening of Aristo.
“After a long period of impact from the pandemic, we are pleased to see positive signs of recovery and a promising outlook for the business. The recommencement of international travel flow, particularly from Chinese tourists, is a trend that is expected to benefit our operations in Cambodia and Vietnam.
“With a solid strategy, we are confident in our ability to capitalise on these favourable developments and continue delivering sustainable growth for our shareholders over the long term.”
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