Australian-listed casino operator Donaco International said its revenue fell 58.7% in the first quarter of 2020 compared with a year earlier, as it was “significantly impacted” for three months due to several travel restrictions in the region as part of efforts to stem the further spread of COVID-19 and the pandemic.
Revenue for the quarter ended March 31 was A$10.53 million ($6.79 million), compared to A$25.5 million for the first quarter of 2019, Donaco said in a filing on Thursday. The company posted a negative March quarter earnings before interest, taxation, depreciation and amortization (EBITDA) of A$1.13 million, compared with a positive EBITDA of A$10.82 million a year earlier.
Donaco’s flagship location, Star Vegas Resort and Club, is in Cambodia, near the border with Thailand. The Aristo International Hotel and related casinos (pictured) are near the border between Vietnam and China. Both properties have been shut down since April 1 due to the coronavirus crisis.
In its latest filing, Donaco said its Star Vegas properties posted revenue of A$8.37 million and EBITDA of A$500,000, down 60.4% and 93.5%, respectively, from a year earlier. Revenue at the Aristotel complex was A$2.6 million and EBITDA was A$500,000, down 60.0% and 87.0% respectively from a year earlier.
The company said cash flow from operations of A$5.1 million was negative and the group’s net debt rose to A$60.8 million from A$50.9 million a year earlier.
Donaco also said the closure of casino operations was having a “substantial impact” on the group’s business, with the company introducing “cost-cutting measures, including the total number,” to preserve liquidity. The casino operator said the Aristo property could “reopen in May 2020 as determined by the Vietnamese government.”
“It has been a challenging quarter for Donaco in both casinos impacted by COVID-19 with significantly less gaming activity,” said Mel Ashton, Donaco’s president, in prepared remarks. He added: “Now that casinos are temporarily closed, liquidity preservation is an important priority. We will take appropriate action and remain sound financial as to when operations will resume.”
As of March 31, 2020, the Company had a cash balance of A$18.87 million. The Company previously said it expected a “cash burnout rate” of between US$800,000 and US$900,000 per month during the temporary closure of two casinos.
In a recent filing, Donaco confirmed it was still in discussion to seek consent for payments related to the settlement of a long-standing dispute with Taiwan’s Mega International Commercial Bank Limited and those who sold the Star Vegas complex, a key lender of the company.
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