Southeast Asian casino investor Donaco International Ltd has reported a net loss of AU$36.8 million for the six months to 31 December 2018, the results directly impacted by an AU$38.2 million impairment charge on the value of its gaming license for Cambodian resort Star Vegas.
The impairment relates to ongoing legal battles with the company’s Thai vendor and former business partner, who has spent much of the past 18 months operating illegal casino operations next door in defiance of non-compete provisions and more recently has tried to cancel Donaco’s 50-year-lease of the land on which Star Vegas is situated.
The matter has gone to arbitration in Cambodia, while legal proceedings are also ongoing in Singapore – where Donaco is seeking damages of US$190 million – and Australia where the court has imposed a freeze order on the Thai vendor’s shares.
On its gaming floors, Donaco saw group revenue fall 9.6% to AU$39.7 million due to lower VIP win rate and temporary disruptions caused by a Chinese crime syndicate operating on the Chinese border near the company’s Vietnamese property, Aristo.
VIP and Premium revenue at Aristo was down 79%, with VIP turnover falling from RMB6.9 billion in 2H17 to RMB1.2 billion and EBITDA down 59% to RMB13.5 million
Group-wide EBITDA was AU$12.9 million, down from AU$19.4 million in the prior year period.
In its results announcement, Donaco said both properties were showing recent improvement, with Rolling chip VIP turnover at Star Vegas up by 103% following the successful introduction of new junkets and daily average visitation rising 30.7%.
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