Embattled Star posts AU$18 million EBITDA loss in latest quarter

Star Entertainment has reported an AU$18 million (£9.2 million/€10.9 million/ US$11.8 million) EBITDA loss for the previous quarter as it continues to manage regulatory turmoil and its newly opened Star Brisbane joint venture.

In an ASX filing Tuesday (29 October), Star reported revenue of AU$351 million. This was an 18% decline year-on-year and an 11% decline from last quarter. The company attributed the drop to “a challenging operating environment and the continued implementation of mandatory carded play and cash limits.”

This report was the first since the Bell Two ruling, in which Star was again found unsuitable for licensure in New South Wales 17 October. Star Sydney was fined AU$15 million and will be subject to further regulations, but its licence was not revoked.

The company said Tuesday the fine would be paid in three installments–31 December, 31 March 2025 and 30 June 2025.

Star Sydney posts EBITDA loss of AU$22 million

Star Sydney’s revenue of AU$186 million in Q1 was down 16% from last year and 11% from last quarter. But its EBITDA loss of AU$22 million was a heavy drag on the company’s overall performance.

“Revenue continues to trend downward, with a $4.4 million impact from system outages in July 2024,” Star said. “The challenging consumer environment and changes in business practices have weighed heavily on gaming, particularly in the premium segment.”

Mandatory carded play–the requirement from state regulators for all play to be done with loyalty cards to track player behaviour–was implemented partially on 19 August and across the entire casino 19 October. Cash limits of AU$5,000 have also been implemented, and this will be reduced to AU$1,000 next August. Star noted that these changes have accelerated revenue declines.

“In the 50 days prior to the introduction of mandatory carded play and cash limits on 19 August 2024, revenue was down 11% compared to the FY24 average, and 6% below the 4Q24 average,” the company said. “Since 19 August 2024, revenue declined a further 12%.”

Star Brisbane, Gold Coast more promising

Perhaps the best aspect of the Q1 report came from Star Gold Coast. That property posted AU$108 million in revenue, a 6% increase from last quarter. Still, its AU$7 million in EBITDA was a 70% decrease from last year.

As with Star Sydney, the company warned that “Legislation introducing mandatory carded play, mandatory pre-commitments and cash limits” in Queensland is soon to be implemented.

The multibillion-dollar Star Brisbane development generated AU$45 million in revenue in 33 days after opening 29 August. Star’s share of that was AU$4 million. The development is a joint venture with Chow Tai Fook and Far East Consortium. The two partners control 25% each with Star controlling the remaining 50%.

So far, only the first phase of the property is open. This encompasses the casino and select amenities, with more opening phases set throughout 2025.

Cash increasing, expenses decreasing

Star’s operating expenses were AU$287 million in Q1, down just slightly (-1%) from last quarter. In September specifically, expenses were AU$83 million as compared to AU$106 million in August. The company noted that it has “now commenced the cost out program targeting at least $100 million of initial annualised costs savings, with implementation targeted by March 2025.”

Available cash at the end of the quarter was AU$149 million, up from AU$130 million at the end of August. The company received the AU$60.5 million in net proceeds from the sale of its Treasury Brisbane casino 27 September. There was also mention of the company’s recent AU$200 debt facility agreement, which is to be split into two tranches of AU$100 million.

“The first tranche is expected to be available to be drawn, subject to conditions precedent (including long-form documentation), until 20 December 2024,” Star said.