The Star’s results included revenue of $1.1875 billion, down 29 per cent on the year prior, alongside the after-tax loss of nearly half a billion dollars.
It also noted that it had reduced its operational costs by $109 million.
Gaming revenue was down across The Star’s properties by 37 per cent, while non-gaming revenue fell by five per cent at The Star Sydney and by two per cent at The Star Gold Coast. Notably, business events and hotel revenue largely made up for lower food and beverage revenue on the Gold Coast.
The Star attributed the drop in revenue to continuing soft trading conditions, regulatory reforms, its remediation program following being found unsuitable to hold casino licences in New South Wales and Queensland and loss of market share.
In its results announcement, The Star said it had $189 million in cash as of August 25 and continued to warn of ongoing uncertainty about the future of the company.
“Key interdependent events” flagged as “critical to the group’s liquidity and financial outlook” included a coming fine from legal proceedings against The Star by financial crimes watchdog AUSTRAC, securing covenant waivers from its lenders, completing the $300 million investment from Bally’s and Investment Holdings, successfully divesting its 50 per cent investment in Queen’s Wharf in Brisbane, restoring its casino licences and growing revenue.
Its covenant waivers are currently up in the air with The Star and its lenders unable to reach an agreement on the terms thus far.
“I want to acknowledge the hard work and commitment of our team members in the face of the ongoing challenges of the group,” said The Star Entertainment Group’s CEO, Steve McCann.
“While there remains work to be done, I note the significant progress that the group has made on its remediation journey to date and the implementation of regulatory reforms.
“The group has sourced additional funding to enable The Star to continue to provide thousands of jobs and support tourism and entertainment in the markets in which we operate.
“Our announcement today highlights a number of key interdependencies that are critical to the group’s future.
“The group continues to require significant support from a range of its stakeholders including governments, regulators, lenders and investors.
“Without that support it will be difficult to navigate the various challenges facing the group and to create a sustainable future for the business.”
The Star has traditionally controlled a significant footprint of event space and a large inventory of hotel rooms, however this is set to decrease, with the sale of its event centre at The Star Sydney and its Queen’s Wharf exit.
It will, however, increase its presence on the Gold Coast, when it takes full ownership of The Star Gold Coast, which is part of the deal for the Queen’s Wharf sale.
