Donaco losing €800k a month due to casino shutdown
Losses attributed to zero revenues and costs associated with maintaining its properties.
Australia.- Casino operator Donaco International Ltd said in a filing that it expects a “cash burn run rate”of between €700,000 and €800,000 per month during the temporary closure of its two casinos.
This is attributed to the revenue loss as well as costs associated with “maintaining the casino assets” and other “associated corporate costs”.
Donaco’s two casinos, the Star Vegas Resort and Club, near Cambodia’s border with Thailand, and the Aristo International Hotel, near Vietnam’s border with China have been temporarily closed do to Covid-19.
“The temporary action follows the Cambodian government’s announcement mandating the closure of all casinos from 1 April 2020, alongside the Vietnam government’s measures to temporarily close all casinos for a period of 15 days from 1 April 2020,” Donaco said in its latest filing.
“As a result, Donaco has had to take difficult, but unavoidable, measures in relation to its staff, including reductions in headcount, placing employees on leave, standing down casual staff and deferring non-essential expenditure,” the firm told the Australian Securities Exchange.
The document quoted Donaco’s chairman, Mel Ashton, as saying: “The situation we are facing with the Covid-19 pandemic is unprecedented and we’ve unfortunately had to take some drastic measures with our staff, including redundancies and pay cuts.
“This is to ultimately ensure the business remains afloat and to be in a healthy financial position once we eventually rebuild the team and restart operations,” he added.
The filing went on to state:
“Donaco continues to consider liquidity measures and sources of a capital injection to guarantee the business remains in a sustainable and dynamic position during this period of global uncertainty.
“The duration of the Covid-19 crisis and the period of closure of the casinos will obviously affect the requirement for a capital injection but … the board is confident of both the ability to maintain the business during an extended period of closures and source capital as required to strengthen the balance sheet.”