Donaco Q2 Sales Slack, C.E.O. Exits CEO Looking at Cash Burnout Rate

Australian-listed casino operator Donaco International said it aims to keep its cashing rate between $800,000 and $900,000 per month amid a slump in its COVID-19-related business.

The company posted a sales drop of more than 95% in the three months to June 30, it said in a filing on Friday.

Meanwhile, Paul Averkle will step down as the company's chief executive Tuesday (Aug. 4). Donaco said outgoing CEO Averkle will remain in office on a "monthly basis" after his originally planned June exit to help the company make a "smooth transition" to a new CEO.

"The CEO recruitment process is ongoing," the company said in a recent filing. "The board has interviewed several outstanding candidates, and people are "currently under review," it added.

Donaco said quarterly revenue was A$0.9 million ($642,000) for the three months ended June 30, compared to A$20.3 million in the prior year. Group earnings before interest, taxation, depreciation and amortization (EBITDA) were negative compared to A$3.0 million in the prior year, compared to A$4.8 million.

"The June quarter was significantly impacted by the outbreak of COVID-19 and the subsequent restrictions on casino operations and border closures," the company said.

Donaco operates casino hotel properties in Indochina: the Star Vegas Resort and Club (file photo) in Poipet, on the border between Thailand and Cambodia, and the Aristo International Hotel and its related casinos in Laoqai, on the border between Vietnam and China.

The company said in a filing that Star Vegas had been closed since April 1 on orders from Cambodian authorities. Aristo also closed on April 1 but could reopen in May, Donaco added.

"Despite Aristo's official reopening, casinos remain limited with borders closed to China, where most of Aristo's customers come from," the company said.

"The prolonged closure of the DNA Star Vegas and Aristo International hotels has had a significant impact on Donaco's operations," it added

The boutique casino operator said it was "focused on tightly controlling and reducing costs and capital costs" to cope with the current business downturn. Donaco added that it had set a monthly target cash incineration rate by keeping casino assets and related enterprise costs "around US$800,000 to US$900,000."

The company said it had cash and cash equivalents amounting to A$12.8 million as of June 30.

Donaco said management "in response to the slowdown in activity" at Aristo has implemented a number of cost-cutting measures, including "reducing the total number of employees and postponing various capital expenditure projects."

BY: 파친코