Australian-listed Donaco International Ltd. is planning a series of cost-cutting measures to offset Covid-19 losses following a weak second quarter.
Its flagship Star Vegas resort in Poipet, Cambodia—the city’s largest casino—has yet to reopen after more than three months, though Donaco says it expects to undergo assessment by Cambodia’s Ministry of Health (MOH) “within the next few weeks” as the first step toward reopening.
According to Asia Gaming Brief, Cambodian Prime Minister Hun Sen gave the OK for casinos to reopen earlier this month pending MOH approval. Meanwhile, Thailand has extended its state of emergency until the end of August, which could affect any potential easing of border restrictions between the two countries.
Casinos in the border city of Poipet derive most of their players from Thailand, where gambling is illegal, as well as Vietnam, which limits casino gaming to foreign visitors.
“Donaco expects patronage numbers will remain low at Star Vegas until the border between Thailand and Cambodia is reopened,” the company said.
“The company is optimistic that the Covid-19 situation will continue to improve in the region Star Vegas operates in and the Cambodian government’s announcement is a positive step towards a resumption of normal operations.”
GGRAsia reports that in early April, when Star Vegas closed, the company said it expected a “cash burn run rate” of between US$800,000 and US$900,000 per month.
Donaco’s Vietnam property, Aristo International in Lao Cai, has been operating on a limited basis as the border with China remains closed. Average daily visitation is 14 players. Rolling chip VIP turnover reached $34 million, net revenue reached 0.4 million while operating expenses are at around $0.6 million, reported Inside Asian Gaming.
“The June quarter was significantly impacted by the onset of Covid-19 and the restaurant restrictions on casino operations and border closures. The closure of both DNA Star Vegas and Aristo International Hotel for an extended period of time has had a material impact on Donaco’s operations,” said the company in a filing to the Australian Stock Exchange on Friday.
Donaco said it will turn its attention to cost control due to continued impact from the coronavirus.
“As a result of the shutdowns, Donaco has placed heavy emphasis on tightly controlling and reducing costs and capital expenses to ensure the company’s sustainability into the future.”
Chairman Mel Ashton said, “We have taken pragmatic measures to adopt a cost control strategy at both casinos as Donaco continues to be impacted by Covid-19 travel restrictions.”
The company filing also noted that Donaco CEO Paul Arbuckle stepped down on August 4. Arbuckle’s departure was announced in December. Donaco said the recruitment process for its next CEO is ongoing.
Meanwhile, a total of 21 casinos in Sihanoukville have petitioned the authorities for permission to resume operations, the Phnom Penh Post reports.
