- The Reef Casino Trust (RCT) is withholding its six-month distribution for the first time in 20 years, due to the impact of COVID-19 on its operations
- Following the implementation of state quarantine measures, the trust’s sole asset, the Reef Hotel Casino Complex in Cairns, ceased operations on March 23 and remined closed until the end of the financial year
- This significantly impacted the company’s cash-flow and resulted in a half-year net loss of $23.69 million, compared to a net profit of $755,000 in 2019’s corresponding period
- The casino recently reopened on July 3 and The Reef Casino Trust is reportedly receiving positive rentals and is once again returning to profitability
- At the end of last week Reef Casino Trust closed 10.1 per cent in the green for $2.03 per share.
The Reef Casino Trust (RCT) is withholding its six-month distribution for the first time in 20 years, due to the impact of COVID-19 on its operations.
Due to state imposed COVID-19 restrictions, casino and food and beverage outlets at the company’s sole asset, the Reef Hotel Casino in Cairns, shut down on March 23, with its hotel operations following suit soon after.
The company’s operations remained in limbo for the rest of the financial year but did reopen early last month after state restrictions were eased to stage three. As a result, Reef Casino was only able to operate for 45 per cent of the half-year period.
This has significantly impacted the company’s cash-flow and resulted in a net loss of $23.69 million, compared to a net profit of $755,000 in 2019’s corresponding period.
The loss was mainly attributed to lower earnings before interest, tax, debt and amortisation, which fell to negative $1.7 million from 4.2 million in 2019’s same quarters. A non-cash impairment of $19.37 million also contributed to the poor figures.
To help manage its funds during the downturn, the company has chosen to not release a six-month distribution to shareholders.
This is the first time in 20 years that no six-month distribution was made available. The company considered the move prudent as its per unit loss for the half-year reached 95.14 cents, a dramatic plunge when compared to a per unit net profit of just over three cents in 2019’s same period.
However, with operations now back up and running, The Reef Casino receiving positive rentals and is once again returning to profitability.
At the end of last week Reef Casino Trust closed 10.1 per cent in the green for $2.03 per share.