Donaco International, the Australia-listed casino operator with venues across Indochina, can’t seem to catch a break. Just after it thought it had its house in order and was ready to bounce back from a weak 2019, the coronavirus comes in to upset any positive momentum. As it scaled back operations and was forced to send workers home with no pay, Donaco’s wallet took a beating and it apparently now is finding itself in a bad spot. It announced today, as part of the company’s updated financial report (in pdf) sent to the Australian Securities Exchange (ASX), that it needs some outside assistance to help cover its bills.
In releasing the financial numbers covering the last six months of 2019, new Donaco non-executive chairman Mel Ashton took advantage of the opportunity to stress the need for an injection of funds. He stated in the filing, “The board is aware that the liquidity of the company may tighten from the closure of the border crossing between China and Vietnam in January due to the outbreak of Covid-19. Donaco is seeking to access financing to support payment obligations and working capital requirements of the company.”
As last year drew to a close, Donaco could only play the cards it had been dealt, and reported a net loss after tax of AU$1.5 million (US$985,000) for the last half of 2019The good news is that this was much better than the $36.8-million ($24 million) net loss that it was forced to report for the same period a year prior. Supporting the company’s results more was a non-cash impairment charge sent last year on the value of the license for the Star Vegas casino as part of the cancellation of an online gaming license. That impairment was for $4 million.
Part of the improvement in the financial results can directly be attributed to the company’s Aristo casino in Vietnam. Despite the country now having to be more diligent over concerns of the coronavirus, the casino reported a 42% increase in its net gaming revenue for the last six months of 2019, taking in around $3.8 million. Star Vegas, however, dropped 18% to $16.7 million.
Donaco CEO Paul Arbuckle, who handed in his resignation this past December, weighed in on the company’s activities, as well. Arbuckle is assisting the company until a replacement boss can be found, and said in the filing with the ASX, “The impact of Covid-19 during February has been significant on the Aristo, as visitation has dropped significantly with travel from China being curtailed. We expect these conditions to continue until travel restrictions are removed and will tightly manage expenses at the venue throughout this period. The impact is far less noticeable at Star Vegas, although we will also take a cautious approach at that venue and keep a tight rein on expenditure.”
He added that the company will remain “cautious” about the possible impact the coronavirus outbreak may have on Donaco’s financial health for the first six months of 2020, and concluded, “We will tightly manage our expenses over this period until normal border operations are restored [in Vietnam].”