Donaco Boosts Q2 FY2025 Revenue and Cash Amid Regional Regulatory Watch
Donaco International posted modest revenue and EBITDA gains in Q2 FY2025, alongside a stronger cash position, while navigating regulatory uncertainties in Southeast Asia.
- Group net revenue rose slightly to A$10.30 million
- EBITDA improved to A$5.77 million, up 14% year-on-year
- Star Vegas operation showed revenue and EBITDA growth
- Aristo maintained steady performance despite tax dispute risks
- Cash reserves increased to A$36.26 million, reflecting strong liquidity
Steady Growth in a Complex Market
Donaco International Limited has reported a solid second quarter for fiscal year 2025, with group net revenue edging up to A$10.30 million from A$10.25 million in the prior quarter. EBITDA also rose to A$5.77 million, marking a 14% increase compared to the same quarter last year. These results underscore Donaco's ability to sustain operational momentum amid a challenging Southeast Asian gaming landscape.
The company’s flagship Star Vegas casino, located on the Cambodia-Thailand border, was a key driver of growth. Star Vegas posted net revenue of A$6.57 million, up from A$6.30 million, and property-level EBITDA climbed to A$4.22 million from A$3.83 million. Average daily visitation increased to 957 players, buoyed by the ongoing success of Donaco’s membership loyalty program launched in early 2024.
Aristo’s Consistency Amid Legal Uncertainty
Meanwhile, the Aristo International Hotel in Vietnam delivered steady, if slightly softer, results with net revenue of A$3.73 million, down from A$3.95 million, and EBITDA of A$2.31 million compared to A$2.52 million previously. Visitation remained stable at around 300 players daily. However, Aristo continues to face a looming tax dispute with Vietnam’s General Department of Taxation over unredeemed gaming chips, with a potential liability nearing A$8.86 million. The outcome of ongoing legal proceedings remains uncertain and could materially affect Donaco’s financials if the tax decision is upheld.
Strengthened Liquidity and Cost Controls
Donaco ended the quarter with a robust cash position of A$36.26 million, up 10% from the previous quarter’s A$33.02 million. This improvement reflects disciplined cost management and steady operational cash flows. The company also maintains access to unsecured loan facilities totaling A$20.6 million, providing additional financial flexibility.
Non-Executive Chairman Porntat Amatavivadhana highlighted the company’s focus on operational synergies and cost controls as key to sustaining earnings stability. He also noted the company’s vigilance regarding regulatory developments, particularly Thailand’s recently approved Draft Entertainment Complex Business Act, which could legalize and regulate casinos within integrated resorts. This legislation, pending parliamentary approval, may have significant implications for Donaco’s Star Vegas operations.
Looking Ahead: Opportunities and Risks
Donaco is optimistic about growth prospects tied to regional tourism initiatives, including the anticipated completion of Sapa Airport in Lao Cai, Vietnam, expected to attract 1.5 million visitors annually. This infrastructure boost could enhance Aristo’s market position.
However, the company remains cautious as it monitors the evolving regulatory environment and unresolved tax issues. The interplay of these factors will be critical in shaping Donaco’s trajectory in the coming quarters.
Bottom Line?
Donaco’s steady financial footing and strategic vigilance position it well, but regulatory and legal uncertainties warrant close investor attention.
Questions in the middle?
- How will the final outcome of Vietnam’s tax dispute impact Donaco’s earnings and cash flow?
- What specific effects will Thailand’s Draft Entertainment Complex Business Act have on Star Vegas operations?
- Can Donaco leverage regional tourism growth to offset regulatory headwinds and sustain visitation gains?
