Southeast Asian casino operator Donaco International recently released its financial report for the three months ending December 31, 2023. Despite a slight dip compared to the previous quarter, the company reported a remarkable 184% increase in year-on-year EBITDA.
Financial Overview:
In the mentioned quarter, Donaco reported an EBITDA of AU$5.06 million, indicating a marginal decline from the previous quarter. However, a substantial 184% year-on-year growth paints a positive picture for the casino operator. Group net revenue reached AU$9.73 million, with Star Vegas in Poipet, Cambodia, contributing AU$6.12 million (down 15.5% QoQ), while Aristo International in northern Vietnam added AU$3.61 million (up 45.6%).
Factors Influencing Revenue:
The decline in revenues at Star Vegas is attributed to a decrease in VIP rolling chip turnover. On the flip side, Aristo International exceeded expectations, leading to a surge in net revenue and property-level EBITDA. The success can be attributed to increased tourism following the reopening of borders between China and Vietnam. The Cambodian Government’s recent tourism campaign also contributed to higher visitation from Thailand.
Cash Position and Future Outlook:
Donaco reported a healthy cash position of AU$25.12 million, boosted by a recent injection from majority shareholders. Despite stable international visitation, the company anticipates a substantial improvement in 2025, driven by the opening of the new Sapa airport in Lao Cai, near the Aristo property. Projections indicate an influx of up to 1.5 million passengers annually, promising significant growth opportunities.
Chairman’s Perspective:
Porntat Amatavivadhana, Donaco’s Non-Executive Chairman, emphasized the December quarter as a period of stringent financial management. He highlighted Aristo’s outperformance, showcasing substantial net revenue and EBITDA growth. Amatavivadhana expressed optimism for the remainder of the financial year, citing the strengthening operations and leveraging the rise in regional tourism. The chairman’s confidence stems from the success of the Cambodian Government’s tourism campaign and increasing visitation from Thailand.
Turnaround Strategy:
Donaco’s first half of FY2024 has been promising, and the company is poised to capitalize on the growing tourism trend in the region. The anticipated turnaround strategy aims to deliver solid results, aligning with the positive outlook for the Sapa airport’s impact on visitation numbers. As Donaco navigates through stringent financial management and external factors, the stage is set for continued growth and stability in the coming months.