Embattled Australian gaming operator The Star has announced that it’s expecting lower sequential revenue in the fourth quarter of its financial year (ending June 30th), as revenue from its premium customers declines, expenses from remediation efforts mount and the over economic environment continues to lag.
In a Monday trading update, the group indicated that it was anticipating a quarterly drop in revenue of 4.3 percent, also down 3.3 percent yearly. The group highlights that it’s now expecting its FY24 revenue to be between AU$1.67 billion ($1.11 billion) and AU$1.68 billion ($1.12 billion).
Normalized group EBITDA for the financial year is expected to be between AU$165 million ($110 million) and AU$180 million ($120 million).
In the first three months of 2024 (3Q24 for The Star), the group registered a loss of AU$6.8 million ($4.4 million), attributed to the ongoing absence of high-end players, with total revenue totaling AU$419.2 million ($274 million).
During the period there were drops of 19.3 percent, 20 percent and 28 percent in the revenues from premium gaming rooms in The Star Sydney, The Star Gold Coast and Treasury Brisbane, respectively.
For the fourth financial quarter (ending June 30th), the group is projecting that revenue from its Premium Gaming Rooms (PGRs) will decline by 16.5 percent across the group, compared to the same quarter of 2023.
This is based on declines of 13.2 percent yearly in PGR revenue from The Star Sydney, 22.6 percent from The Star Gold Coast and 18.2 percent from Treasury Brisbane.
However, the Main Gaming Floor delivered ‘a sound performance’, with revenue expected to be up 5.2 percent yearly. This ‘has not been sufficient to offset the overall decline,’ notes the group.
MGF revenue for the group’s Sydney property is expected to be down 0.9 percent yearly, whereas Gold Coast MGF revenue should be up 4.9 percent. Treasury Brisbane’s MGF is also trending down, with expectations for a 6.9 percent yearly drop.
The group is also trying to tackle mounting operating expenses, which have increased to AU$92.5 million ($61.55 million) in its fourth financial quarter.
The group notes that it is seeking ‘a range of initiatives’ to reduce its operating costs, while also reviewing the potential sale of non-core assets.
The group is currently in negotiations for the sale of its Treasury casino, hotel and car park and notes that it has ‘commenced a process to sell the Festival Car Park in Brisbane’.
The Star has faced a raft of executive changes recently, with the group’s Chairman – David Foster – resigning, following the resignations of CEO Robbie Cooke and CFO Christina Katsibouba in the first quarter.
