There are very few companies in the world that have benefited from the ongoing COVID-19 pandemic. The casino industry is severely suffering due to the various lockdowns and a reduced footfall once reopened. Australian Securities Exchange (ASX) listed Donaco International is just one of many reporting huge hits to its revenues.

Donaco International released its latest trading figures on the ASX and they make miserable reading. The company has endured many setbacks in recent years, but the latest published figures are pitiful.

Quarterly revenue weighed in at a mere $900,000 compared to $20.3 million for the same period last year. That is a massive difference. Operating expenses and Corporate Costs plummeted, which is due the Donaco International properties slamming their doors shut. Operating expenses fell from $12.7 million to $2.6 million. Corporate costs dropped from $2.8 million to $1.3 million.

What Donaco International reports as Rolling Chip VIP Turnover was worst hit. These VIPs only turned over $50.7 million the past quarter, down from $1.6536 billion for the same period in 2019. This is due to a lack of customer due to the casino closures and imposed travel restrictions around the world.

A massive reduction in Group EBITDA from $4.8 million to negative $3.0 million is the overall result.

Donaco International Is Bleeding Cash

Casinos need customers to survive. They still have huge bills to pay even if nobody is gambling in their properties. Staffing costs are substantial due to the sheer number of employees. The majority of employees are temporarily out of work, but casinos still have astronomical costs.

Customers are slowly returning but Donaco International reported a 98% drop in casino visitors compared to 2019.

Donaco International also revealed it is burning through cash at a rate of between $1.12 and $1.26 million per month. The company is looking at all available cost-cutting measures according to its Non-Executive Chairman Mel Ashton.

“We have taken pragmatic measures to adopt a cost control strategy at both casinos as Donaco international continues to be impacted by COVID-19 related travel restrictions.”

Ashton had some positive news in the form of an agreement to defer certain repayments. The company is deferring repayments and waiving covenants until the end of the year. A USD$5 million ($7.02 million) payment to Donaco’s main lender, Mega Bank, is one of the deferred payments.

“The placement undertaken also reduces debt, and provides immediate financial stability to the company.”

The company has $26.7 million in cash at the bank and on deposit which will keep it afloat. $14.41m of that sum stems from a recent share issue. Donaco International issues new securities underwritten by Lee Bug Huy and Lee Bug Tong. The duo owned a 17.99% stake in the company before the share issue, they now control 45.33%.

Searching For a New Chief Operating Officer

The announcement from Donaco International ended with the news it is looking for a new Chief Operating Officer (CEO).

Paul Arbuckle officially steps down from his position of CEO on August 4, 2020. He handed in his notice after only six months at the helm. His contract meant Arbuckle had to give six months notice. This ended on June 4, 2020 but he continued on a month-by-month basis.

“The CEO recruitment process is ongoing” Mr Paul Abuckle will be stepping down as CEO on 4 August 2020. The Board has interviewed a number of quality candidates that are currently under consideration.”

ASX rules state at least two of a listed company’s directors must be Australian. Donaco International saw a number of directors leave the company around the time of Arbuckle’s resignation. This forced Donaco to stop trading, but the appointments of Ashton and Simon Vertullo allowed trading to resume.

Ashton is leaving the company now the aforementioned share issue is complete. Arbuckle leaves the company on August 4, so the CEO needs to be Australian and put into their role ASAP.