Getting a new CEO may have done Donaco International some good. Lee Bug Huy was given the position this past September and the casino operator has now moved into better times in the fourth quarter of the year. According to a filing with the Australian Securities Exchange (ASE) from today, Donaco has hit positive EBITDA (earnings before interest, taxes, depreciation and amortization) for October and November and expects the trend to continue through the end of the year.
Donaco’s casino efforts are primarily centered on the Asian market and it runs the Star Vegas Resort and Club in Cambodia and the Aristo International in Vietnam. The COVID-19 pandemic forced the Star Vegas to close this past April, only finally reopening at the beginning of September and, since beginning to welcome back gamblers is “no longer making a loss.” The company added in its filing that the shift to a positive EBITDA was “driven by business initiatives implemented by the new board and executive team” that include “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 company had a lot of difficulty due to the coronavirus pandemic and, in September, indicated that it had a loss of $43.5 million for the 12-month period that ended on June 30. That led to the implementation of a “continued cost control strategy” that, combined with the reduction in pandemic restrictions, had “improved the position of the business” and allowed it to narrow its fiscal-year loss to $41.6 million. Some pandemic restrictions are still in place; however, Donaco is confident that it will be put things back to normal soon.
The filing also addressed the ongoing disagreement with former business partners and outstanding debt owed to one of its creditors, Mega International Commercial Bank out of Taiwan. The bank is working with Donaco to facilitate payments negotiated between the casino operator and the former partners, and previous discussions between Mega International and Donaco have addressed how best to handle the situation amid the global pandemic. The lender has already made arrangements to give Donaco a little flexibility with its outstanding credit debt and Donaco added in its filing that it has “continued paying down of debt with Mega Bank.” It expects to be able to pay the outstanding balance – around $7.8 million – sometime during fiscal year 2021.
