Donaco International Ltd. (ASX:DNA) chairman Stuart McGregor updated stakeholders during the company’s 2016 annual general meeting (AGM) on Thursday. McGregor began the body of his address by noting that 2016 had been a transformative year with significant progress. Most notable?was the integration of DNA Star Vegas in Poipet, Cambodia situated on the Thai border.
That acquisition and integration resulted in a 7-fold increase in revenues during the year and went so smoothly that management was not distracted from improving the?performance of their Lao Cai, Vietnam asset, Aristo International Hotel and Casino. The chairman commented that the Lao Cai property experienced growth in gaming and non-gaming revenue.
Mr. McGregor noted that the board and management teams had met goals set out at the company’s 2015 AGM by reducing debt after their Star Vegas acquisition and were able to deliver dividends to shareholders for the first time. Strong earnings and cash flow from Star Vegas were credited with the achievement.
“We will be focused over the next 12 to 18 months on ensuring that our debt is paid down, in order to ensure that shareholders reap greater benefits from the strength of our cash flows in the future. It is worth noting that our balance sheet is strong, with net debt to equity of only 15%, however, we remain focused on paying down the remainder of our acquisition financing as a priority,” said McGregor.
Chief Executive Officer Joey Lim followed McGregor’s presentation with facts and figures encouraging to stakeholders. He said, “Overall, the Group generated A$143.4 million of revenue, of which DNA Star Vegas contributed A$120 million with an underlying EBITDA of A$66.6 million.”
The company reported net after-tax profits of A$78.7 million. A$55.2 million of that figure was attributable to a once-off increase in valuation of the Star Vegas property. A better indicator of Donaco’s success over the last year was a A$55.9 million net after-tax profit according to Mr. Lim. He then noted that operating cash flow of A$48.7 million enabled the company to focus on debt reduction. “We finished the year with a net debt to equity ratio of 15%,” said Lim.
In other comments, the CEO stated that they had followed through on plans to target more mass gaming players at Aristo and that strategy shows signs of improving stability in the numbers.?On September 20, 2015, Star Vegas opened the Heng Shen Room, catering to high rollers and discerning gamblers.
At the invitation of the Vietnamese government, in 2002 Mr. Lim traveled with his grandfather, Genting casino empire founder Lim Goh Tong, to look at the possibility of establishing the first legal casino in Vietnam. The patriarch gave approval for the Lao Cai location. Donaco merged with ASX-listed company Two Way Limited in 2012, finding their way onto the Australian Stock Exchange and the company was renamed Donaco International Ltd. Donaco is completely independent of Genting. Joey Lim’s brother, Benjamin Lim also sits on the board.