Donaco results still hampered by ongoing litigation

Australia-listed Donaco International is still dealing with the impact of its ongoing legal battle with its former Thai vendor, recording a statutory loss of A$36.8 million for the six months ended Dec. 31, 2018.
Group revenue declined to A$39.7 million, due to lower VIP win rate at Star Vegas and temporary disruptions as a result of a Chinese crime syndicate at the Aristo.
The group recorded a EBITDA of A$12.9 million, and generated an underlying NPAT of A$2.7 million.
Donaco said the statutory loss was a result of a A$38.2 million non-cash impairment charge in value of Star Vegas casino license.
The company has been involved in a lengthy legal battle after learning that its former Thai partner had been running illegal casinos next to Star Vegas, breaching non-compete agreements.
Donaco said it has been working to rebuild its Star Vegas business since, advising that its rolling chip VIP turnover increased 103 percent in FY19H1 following the introduction of new vendors.
The property also saw a 30.7 percent increase in average daily visitation.
However, Star Vegas EBITDA fell 35 percent to THB 314.7 million, reflecting lower VIP win rate, lower slot machine revenue and costs associated with setting up online gaming.
Looking ahead, the company says the introduction of new mass market tour groups from China and Korea to Star Vegas is expected to generate “meaningful revenue” in the first half of 2019.
“Management focused on implementing improvements that will generate long-term growth at Star Vegas, including directing marketing spend towards attracting both VIP junkets and mass market tour groups.”
Over to its operations in Vietnam, Donaco said its Aristo International Hotel has seen improving trends in the December quarter, following disruption from Chinese crime syndicates in the first half of the year.
“At Aristo, we responded to disruptions by engaging with authorities, reducing corporate costs, and increasing marketing initiatives to drive increased visitation.”
VIP and premium revenue was however down 79 percent, VIP turnover was down RMB1.2 billion while EBITDA fell 59 percent to RMB 13.5 million, it said.