Star Vegas Resort operated by Donaco International, an Asian casino operator, has suffered in recent years. Donaco purchased Star Vegas Resort in July 2015, along with Club in Poipet. Both are located in Cambodia. The sale was $360 million. However, since day one it seems the casino deal has had issues that have led to million dollar losses in revenue for the last two years.
A report to the Australian Securities Exchange is more positive than it was a year ago. Donaco states Star Vegas Resort is on the rebound and revenue will be up to where it should have been over a year ago.
Donaco International had to win an injunction a bit ago with freezing assets of two Thai vendors that were improperly doing business, according to the casino operator. Perhaps, it was the news that the Thai vendor’s assets would be frozen that has helped the company see a new outlook.
Donaco was working with the Thai vendors with the agreement that Star Paradise, a second hotel-casino they purchased would not be opened or in competition with Star Vegas. However, the partner attempted to operate Star Paradise, which is part of the row between the two companies.
Of course, the main reason for the rebound is seen in the figures. Management for the last year has worked to improve the casino by getting in more VIP junkets. For the first quarter, the company is reporting a profit of $594 million. The figure shows a 25 percent deficit from last year’s total, but overall it is a 64 percent increase for the company if one compares the rather bleak earnings for the first half of the year and the increase in the second half of 2017.
The company will need to recover their losses, and it is not going to be easy. Investors are not exactly happy with what they see; given the stock is 43 percent in the read. Donaco also had to buy back or cancel sales of 3.35 million shares. Despite that issue, the company did report bringing in $579, 300.
The Popularity of Cambodia
Cambodia is a hot place to invest in casinos. Donaco began their investment in Cambodia because it seemed like a popular place for tourists wishing to gamble and investors were interested. Investors are still looking at Cambodia, but they are not as keen to invest in Star Vegas at this time.