Donaco Worldwide Ltd (ASX: DNA) Outcomes 1S FY21 Investor briefing Q&A

Questions / solutions on the outcomes of the first half of FY21

Sydney, March 5, 2021 AEST (ABN Newswire) – Donaco Worldwide Restricted (ASX: DNA) (FRA: SKU) hosted an investor briefing to debate the corporate’s half-year outcomes on Friday February 26, 2021. Beneath is the abstract offered by Donaco’s administration crew throughout the briefing, adopted investor questions answered throughout the webinar.

Presentation – Gordon Lo, Chief Monetary Officer

The semester has been a time of adjustments and challenges for Donaco, as we’ve needed to overcome exterior challenges with COVID-19 and navigate internally via adjustments in possession and administration.

Throughout this era, Donaco carried out its technique with strict management over our working prices, which resulted within the opening of DNA Star Vegas and Aristo Worldwide Lodge within the final three months of the fiscal 12 months. , from September to December. We’ve modified our technique to adapt to the pandemic, which has led to a return to constructive EBITDA of AUD 2.7 million for the final three months of the 12 months, for half-year complete EBITDA of 0.2 million bucks.

This was led by the variety of strategic initiatives we’ve carried out to deal with the impacts of the pandemic and supply a strong platform for the expansion of the enterprise. These initiatives included the shift in goal prospects as we renew our deal with attracting native space prospects to Star Vegas, with a purpose to cut back our worldwide personnel bills, in addition to sturdy capital administration and decreasing our prices.

We had been additionally profitable in repaying debt with our predominant lender Mega Financial institution, which was lowered to US $ 7.8 million from the unique US $ 100 million – and we’re on observe to repay the remaining debt. throughout fiscal 12 months 2021.

One other milestone was the profitable decision of all Star Vegas associated authorized issues. This follows the approval obtained from Mega Financial institution in December and the settlement supplies a secure platform for the long-term progress of our Star Vegas operations.

Subsequently, the finished administration crew and board renewal technique has yielded constructive outcomes as Star Vegas and Aristo proceed to function on a restricted foundation.

Concerning our monetary knowledge, the constructive EBITDA achieved was motivated by a proactive technique of price management whereas lowering working and enterprise bills.

Mega Financial institution’s approval of the Star Vegas settlement resulted in Donaco recording non-cash earnings of AU $ 52.6 million (equal to US $ 38 million) from the settlement, which equates to a internet constructive results of 48. AU $ 4 million (equal to US $ 35 million). .

On the finish of the interval, we maintained a wholesome money steadiness of AU $ 12.7 million, with none efficient curiosity protection or debt ratio covenants. This follows a capital injection of A $ 14.4 million to facilitate repayments to lender Mega Financial institution.

As a result of impacts of COVID-19, our working money circulate decreased to AU $ 1.4 million from AU $ 7.6 million in pcp.

Taking a look at Star Vegas particularly, the on line casino reopened in September 2020 at restricted capability, and the strategic initiatives taken and proactive price management measures resulted in a constructive EBITDA of AU $ 2.9 million.

Whereas Aristo, which reopened in Could 2020 and continues to function on a restricted foundation, has been affected by the drop in overseas guests because the border with China stays closed, leading to an EBITDA lack of 700,000 Australian {dollars}.

Throughout this second half of the 12 months, we are going to proceed to implement the strategic initiatives carried out throughout the first six months, whereas sustaining strict management over prices.

In January, a COVID-19 outbreak occurred across the bigger regional space wherein Star Vegas operates, which is able to possible have an effect on Donaco’s short-term income and EBITDA. Nonetheless, we anticipate this to be a short lived, short-term affect, offset by a constructive long-term outlook for the corporate, as vaccinations start in Southeast Asia within the second half of the 12 months. For instance, in Cambodia, COVID-19 vaccinations began this month and Vietnam is anticipated to begin earlier than the tip of March.

As beforehand talked about, we carried out an efficient technique throughout the semester which led to a return to constructive EBITDA.

We did all the things we might throughout the first half to repair what wanted to be mounted internally, and we are actually prepared to maneuver ahead as soon as the COVID-19 state of affairs improves.

Q&A session – Lee Bug Huy, CEO and Gordon Lo, CFO

Q: Does the Thai authorities have the choice to legalize playing in Thailand? In that case, what have the board and administration put in place to mitigate the monetary danger?

At this level, we do not anticipate the Thai authorities to legalize playing within the nation. As we resolve the consequences of COVID-19, we are going to proceed our rigorous cost-containment technique and put together for the border to reopen.

Q: I’m referring to notice 8 of the semi-annual accounts, when is the Ocean Financial institution $ 1.8 million mortgage due?

The Ocean Financial institution mortgage is due in April 2021 and Donaco plans to increase it till the tip of 2021.

Q: Is there a chance of capital administration as soon as the state of affairs is normalized? What step must be taken earlier than this occurs?

We do not plan to lift funds anytime quickly. We don’t rule out finishing up a capital enhance, however any enhance we stock out will probably be aimed toward advancing the monetary progress of our firm.

Q: How is Star Vegas technique totally different for gamers immediately?

We nonetheless undertake the identical technique for Star Vegas. Nonetheless, because of the impacts of the pandemic, we’re attracting gamers from the native area to the on line casino, whereas after all protecting the security of our workers and gamers our primary precedence.

Q: When does the federal government of Vietnam and Cambodia anticipate full vaccinations to happen? I am attempting to estimate when Donaco expects a full reopening of the casinos?

We’re following the requirements and protocols offered by the governments of Vietnam, Cambodia, alongside Thailand and China, and to this point there is no such thing as a affirmation as to when full vaccinations will go into impact.

We are going to totally reopen our casinos because the COVID-19 state of affairs improves. We’re assured that the state of affairs will enhance as vaccine proliferation will increase quickly world wide within the second half of 2021. For instance, in Cambodia vaccinations began in February and in Vietnam, the most recent stories point out that the nation plans to obtain its first COVID-19 vaccines earlier than the tip of March. This offers us hope that the state of affairs will begin to enhance as vaccinations are rolled out throughout Southeast Asia.

Q: The inventory is buying and selling considerably beneath the honest market worth of its casinos – would administration take into account promoting Aristo with a purpose to return shareholder worth to buyers?

We’ve made great progress over the previous semester. For us, Aristo is a on line casino with lots of potential and we’re satisfied that when the borders reopen, the state of affairs will stabilize. We don’t plan to promote Aristo at this level, and we might solely take into account a sale of the on line casino if it offered larger worth to Donaco shareholders.

Q: Does the corporate nonetheless have any Junket companions they’ll rely on when issues normalize in Star Vegas?

Sure, we’ve many Junket Operators who’re keen on partnering with us as soon as issues stabilize in Star Vegas.

Q: What occurred to the slots business in Star Vegas, can we get it again?

There have been quite a few adjustments to the slot machines offered that haven’t been properly obtained by prospects, so the brand new administration has restructured the machines to match the necessities of our goal prospects, and we consider that because of this our slots enterprise will enhance. .

Q: Do you plan to repay all of Mega Financial institution’s debt in 2021?

Sure, in response to schedule, Donaco intends to repay all excellent debt with Mega Financial institution by the tip of fiscal 2021.

Q: If the enterprise can return to profitability within the years to return, what are administration’s priorities with the ensuing money circulate? Will or not it’s used for dividends, buyouts, new developments, acquisitions, and so forth.?

At this level, we reinvest within the enterprise. We handle our liquidity place throughout this era of volatility and keep strict management over our working prices, whereas creating shareholder worth.

Q: With respect to the $ 20.4 million excellent steadiness, what number of of those Gaming Tokens are in circulation?

Of the steadiness of $ 20.4 million to be paid, playing chips in circulation are equal to $ 6.7 million.

Q: How does administration keep forward of the competitors and have rivals closed since final 12 months?

All casinos within the area are in the same state of affairs to ours and function on a restricted foundation. We see Donaco having a aggressive benefit as we’re a properly established on line casino operator with a powerful buyer base and junket agreements. We are going to proceed to implement our technique and construct on our new initiatives, which, supported by a strengthened steadiness sheet and a price management technique, we’re assured that we’ll ship constructive outcomes.

About Donaco Worldwide Ltd

Donaco International Limited (ASX: DNA) Donaco Worldwide Restricted (ASX: DNA) operates leisure, leisure and associated know-how companies within the Asia-Pacific area.

Donaco’s largest enterprise is the Star Vegas Resort & Membership, a on line casino and resort in Poipet, Cambodia, on the border with Thailand. Star Vegas was established in 1999 and is the biggest and highest high quality of Poipet on line casino motels. The institution has greater than 100 gaming tables, greater than 1400 slot machines and 385 lodge rooms.

Donaco’s flagship enterprise is the Aristo Worldwide Lodge, a profitable boutique on line casino in northern Vietnam, situated on the border with Yunnan Province, China. Based in 2002, the property was lately expanded to develop into a model new 5 star resort with 400 lodge rooms. Donaco is a pioneer on line casino operator in Vietnam and owns a 95% stake within the firm, in a three way partnership with the federal government of Vietnam.