Star Entertainment Reports Q1 Loss Amid Premium Player Downturn
Star Entertainment Group has disclosed its trading update for the March quarter of the current year, revealing a net loss of AU$6.8 million (approximately US$4.4 million). The significant downturn has been largely attributed to the lack of attendance by top-tier players at its premium gaming facilities.
The detailed trading update, which was released on April 12, highlighted a worrying decline across Star Entertainment’s key properties.
Quarterly Financial Overview
The Star Sydney witnessed a 19.3% drop in revenue from its premium gaming rooms. Similarly, Treasury Brisbane and The Star Gold Coast reported decreases of 28% and 20% respectively in premium gaming income.
Despite modest gains on the primary gaming floors—6.4% at Treasury Brisbane, 4.6% at The Star Gold Coast, and 5.4% at The Star Sydney—the overall net income for the group still fell by 4.6% to AU$419.2 million (about US$274 million), compared to the same period last year.
EBITDA and Operational Costs
The company reported that normalized EBITDA stood at AU$37.9 million (roughly US$24.7 million). However, monthly performance showed a declining trend with AU$20.2 million (approximately US$13.2 million) recorded in the first month, dropping to AU$10.3 million (about US$6.7 million) in February, and AU$7.4 million (around US$4.8 million) in March.
Operational costs associated with transformation, controls, and risk management have also risen, from AU$90.3 million (about US$58.9 million) per month in the first half of the fiscal year to AU$92.1 million (around US$60.1 million) at the start of this year, as per Asia Gaming Brief.
Regulatory Challenges and Executive Changes
February also saw the initiation of a second investigation into The Star Sydney’s suitability to maintain its casino license, with official proceedings set to commence on April 15. In a related development, Star Entertainment’s CEO, Robby Cooke, resigned last month, citing concerns over the viability of retaining the casino license under his leadership.
This was confirmed on March 22, alongside the announcement of CFO Christina Katsibouba’s departure. David Foster, Chair and Non-Executive Director, will serve as interim CEO until a permanent replacement is appointed.
Our Comment on the Article
The first quarter of the year has posed significant challenges for Star Entertainment, reflecting broader issues within the premium gaming sector and regulatory environment. The departure of key executives amidst ongoing investigations adds layers of uncertainty about the group’s future direction and operational stability.
However, this period of turmoil could also pave the way for strategic reforms and leadership that might realign the company with the evolving demands of the gambling and entertainment industry. As the company navigates these turbulent waters, the industry will be watching closely to see how Star Entertainment adapts and responds to these complex challenges.
