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Donaco Reports Positive Results For October and November

Posted on December 29, 2020 | 11:39 am

Donaco International, the Sydney-based casino operator, has reported good results for October and November after having been hit quite heavily by restrictions related to the coronavirus pandemic this year.

The Australian company operates several leisure and entertainment businesses across the Asia Pacific region. Their most important asset is the Star Vegas Resort & Club, a casino and hotel complex in Poipet, Cambodia. This venue has over 150 gaming tables, more than 1,000 slot machines and 385 hotel rooms.

Another landmark owned by Donaco is the Aristo International Hotel in Vietnam, a location which also has multiple rooms, gaming tables and electronic gaming machines.

The COVID-19 pandemic forced Donaco International to close the Star Vegas in Cambodia in April. The casino remained closed until the beginning of September, when gamblers were welcomed back to the tables while observing strict health and safety restrictions.

The reopening of the casino led to a shift in Donaco’s books, the company no longer lost money but switched to a positive EBITDA (earnings before interest, taxes, depreciation and amortization).

In a filing with the Australian Securities Exchange, the company stated that the shift was made possible by “driven by business initiatives implemented by the new board and executive team,” including “a shift in customer targeting, with a renewed focus on attracting clientele from the local region to Star Vegas, to in turn reduce the company’s international staff expenses and provide a solid platform for growth.”

The restrictions related to the coronavirus pandemic led to significant losses for the company throughout the year. In September, Donaco International reported a loss of 43.5 million dollars for the 12-month period ending on June 30, 2020.

That led to cutting costs across the board, and once some of the restrictions were lifted the company was able to recover some of those losses. Now, the fiscal-year loss is standing at 41.6 million dollars.

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Settlement Reached for Star Vegas

Earlier this year, when the coronavirus pandemic was just a distant threat, Donaco managed to reach an agreement with Thai businessman and politician Somboon Sukjaeroenkraisri regarding a 95-Year lease for Star Vegas Casino.

The deal granted Donaco International security of tenure over the casino until 15 June 2115. In exchange, the company is set to receive $38 million to remove the non-competition and non-solicitation clauses in the share sale agreement, and pay $18 million to settle the claims for unpaid management fees plus interest.

Moreover, Donaco has to pay any outstanding rent and an extra lease payment of $20 million to Lee Hoe Property Co, while Somboon Sukjaeroenkraisri is entitled to receive 120 million shares and $60 million annual earnings before interest, taxes, depreciation, and amortization.

Source: “Donaco returns to positive EBITDA as COVID-19 impacts subside“Donaco International. December 18, 2020.

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