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The Star sees $5.9M in profit for fiscal half-year, amongst inquiry woes

Australian gaming group The Star Entertainment has announced that it achieved some AU$9.1 million ($5.9 million) in profit after tax for its fiscal half year, amongst a “challenging regulatory environment”.

The country’s second-largest gaming operator was able to reverse an AU$1.26 billion ($820 million) loss from its fiscal 1H23, despite revenue falling by some 14.6 percent yearly to AU$865.7 million ($556 million).

The group that the results reflect its ‘implementation of necessary uplift in the control environment’, noting that measures of caused an ‘increased number of guest exclusions’ as well as ‘the introduction of time play management of guests’.

The figure also represents ‘higher levels of risk and compliance resourcing’, with The Star noting that it has also been facing ‘higher remediation costs and increased competition together with a weaker discretionary spending environment’.

In particular, the group notes that ‘premium gaming areas were more significantly impacted’, noting that there has been a ‘shift of revenue mix from premium gaming areas to the main gaming areas’.

EBITDA during the period feel by 43.1 percent yearly, to AU$113.6 million ($73.8 million).

This was slightly propped up by strong non-gaming performance, with the group noting strong hotel occupancy during the period.

A major component of the group’s results announcement was an update on its remediation efforts, given the continued oversight of its operations by authorities.

Speaking of the efforts, The Star CEO Robbie Cooke noted that its “remediation plan was approved in Queensland” but that the group continues to “uplift our risk management, safer gambling and AML capabilities and are starting to embed greater accountability and more robust governance”.

“Despite the challenges of the past 18 months, as a team we are progressing and continuing to work hard to do all that we possibly can to restore our suitability and earn back trust,” notes the executive.

Overall, the group notes that it will demonstrate its ‘commitment to remediation with quality of milestones externally assured by independent reviewer’.

However, it does point out that ‘it will be for the relevant regulator in each jurisdiction to make its own assessment on the adequacy of the completion of the milestones’.

The Star was recently hit with a second official inquiry into the operations of its Star Sydney property, despite having just negotiated terms for tax rates in New South Wales, including employment guarantees and a cashless and carded gaming roll-out.

Speaking of the issue, the group’s CEO noted that “This inquiry will provide an objective forum in which The Star will be able to demonstrate in  NSW it is capable of returning to suitability with particular reference to the actions that have been put in place since the Bell report was published on 13 September 2022”.

In Queensland, the group is looking to finalize its massive Queen’s Wharf Brisbane project, which it now calculates to open in August of 2024, in phases.

No dividend was declared for the period.

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