Australian casino operator, The Star Entertainment Group, reported a net loss of nearly AU$1.69 billion ($1.16 billion) for the fiscal year ending June 30th.
This loss follows the company’s decision to reduce the value of its venues, citing challenging trading conditions and recent regulatory changes expected to negatively impact earnings.
The company also hinted at potential asset sales to raise cash, acknowledging liquidity concerns stemming from current trading levels, ongoing remediation efforts, and regulatory costs.
Despite the significant loss, it represents an improvement from the AU$2.44 billion ($1.68 billion) loss reported in the previous financial year.
The Star remains under regulatory scrutiny, particularly regarding corporate culture and governance. The company acknowledged that trading performance worsened during the second half of the fiscal year, a trend that has continued into the current year.
According to its unaudited preliminary financial report, the company’s revenue for the year reached AU$1.68 billion ($1.16 billion), a 10.2 percent decline year-on-year, while EBITDA fell by 45 percent to AU$174.7 million ($120.2 million).
The Star operates its flagship casino in Sydney, New South Wales, and holds gaming licenses in Queensland, where it recently launched The Star Brisbane, a new casino resort that is part of the AU$3.6 billion ($2.5 billion) Queen’s Wharf Brisbane development.
As part of its liquidity strategy, The Star noted that further equity contributions would be needed for the Queen’s Wharf Brisbane project. Additionally, the company is exploring the sale of non-core assets, including the remaining Treasury venue assets, valued at over AU$300 million ($206.4 million).
Recently, The Star sold the leasehold interest in the Treasury Casino building in Queensland for AU$67.5 million ($46.3 million). The Treasury Casino closed just days before the opening of The Star Brisbane, although the Treasury Brisbane hotel remains operational.
Ongoing sales processes for the Treasury hotel and car park are expected to conclude in the second half of fiscal 2025. The company also identified approximately AU$100 million ($68.8 million) in annual cost savings, expected to be implemented by March 2025.
Capital expenditures for maintenance will be reduced to AU$80 million in fiscal 2025, excluding AU$37 million allocated for remediation projects. By the end of August, the company held AU$130 million in cash and secured a commitment from lenders for a new debt facility of up to AU$200 million.
The Star also announced that trading of its shares on the Australian Securities Exchange will resume on Friday, September 27th, 2024, after being halted since August 30th.
