Donaco International Limited released its financial results for the quarter ending June 30, 2025, revealing a challenging period marked by a significant decline in revenue. The group’s overall net revenue dropped 15.6%, falling from A$10.03 million in the previous quarter to A$8.47 million. EBITDA also decreased by 10.2%, down to A$3.68 million from A$4.10 million in the March quarter.

The most significant factor contributing to this downturn was the disruption caused by the ongoing border tensions between Thailand and Cambodia, which heavily impacted operations at the Star Vegas casino located in Poipet, Cambodia. As stated in the company’s press release (pdf), the facility’s net revenue saw a sharp 31.4% decline to A$4.31 million, while its property-level EBITDA plummeted by 48.9% to A$1.78 million. These numbers reflect the considerable reduction in foot traffic as the border closure halted the flow of Thai visitors, who traditionally formed the bulk of Star Vegas’ clientele.

Star Vegas Faces Struggles Amid Border Restrictions

The Thai-Cambodian border dispute has severely hampered Star Vegas’ operations, as nearly all border crossings were closed to travelers from Thailand starting in late June 2025. The casino, which had previously depended on Thai visitors, has been left with a much smaller, more limited customer base consisting mostly of expatriates and businesspeople from countries such as Indonesia, China, and Korea, who are based in Poipet.

This shift in customer demographics, combined with significantly reduced foot traffic, resulted in Star Vegas experiencing a sharp downturn in both visitation and overall revenue. Average daily visitation decreased from 928 players in the March quarter to just 758 in Q2. Consequently, the property-level EBITDA also showed a marked decrease, reflecting the ongoing operational challenges faced by the casino due to the geopolitical situation.

In contrast to Star Vegas, Donaco’s other property, the Aristo International Hotel in Vietnam, posted more favorable results. Aristo’s revenue for the June quarter rose by 11%, reaching A$4.16 million, up from A$3.75 million in the prior quarter. Additionally, its property-level EBITDA increased by 9.1%, rising to A$2.52 million from A$2.31 million.

The hotel, located near the Chinese border, saw a slight improvement in daily visitation, which increased from 336 to 343 players. This positive performance is attributed to a broader regional tourism recovery, which has supported stable growth at Aristo. Donaco’s management remains optimistic that this trend will continue, provided the recovery in regional tourism remains on track.

Impact of Border Tensions on Star Vegas and the Overall Outlook

Donaco’s Non-Executive Chairman, Mr. Porntat Amatavivadhana, acknowledged the difficulties faced during the quarter, particularly regarding Star Vegas. He emphasized the uncertainty of the short-term outlook due to the unresolved border dispute. Despite the challenges at Star Vegas, Aristo’s performance has been stable, and Donaco’s management is focused on maintaining operational efficiency in both properties.

Looking ahead, Donaco will continue to monitor developments along the Thailand-Cambodia border closely, as the situation remains fluid. The company’s management remains hopeful that regional tourism will continue to recover, which could support Aristo’s performance. However, Star Vegas’ future performance is less predictable, and the company will need to navigate ongoing geopolitical tensions and their impact on tourism.

In addition to its operational updates, Donaco also provided an update on its ongoing Scheme Implementation Deed (SID) with On Nut Road Limited. Under this arrangement, On Nut Road will acquire 100% of the shares in Donaco that it does not already own. A Scheme Meeting is scheduled for August 4, 2025, where shareholders will vote on the proposed acquisition. The Board has unanimously recommended that shareholders vote in favor of the deal, contingent upon the independent expert’s continued conclusion that the scheme is in the best interests of shareholders.