Trading suspension lifted: Star Entertainment sinks to $197M loss
Embattled casino operator Star Entertainment has filed its report for six months ending 31 December 2024, registering a bigger-than-expected net loss as remediation costs continue to hurt despite the latest rescue package.
Shares of the casino operator were suspended from trading on the public markets from March 3 as Star failed to lodge its half-yearly earnings report on 28 February. This was because the company needed to refinance its debt to disclose its financials. For the six months, the operator has reported a net loss of A$302 million ($197 million) while the revenue slid down A$216 million to A$650 million, according to the filing. The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) fell from A$114 million to a loss of A$26 million.
Working hard on establishing additional liquidity: CEO
“Clearly our performance continues to be very challenged as we navigate through a very difficult trading environment, we have been working very hard on establishing additional liquidity to allow the company to continue trading through,” CEO Steve McCann told an investor call, Reuters reported.
One of the biggest hits to the company’s financials came from the New South Wales government’s cashless gaming laws, which are designed to prevent money laundering. Another impactful blow to Star was from loss of market share to its competitors, particularly in Sydney and the Gold Coast properties. Cyclone Alfred even forced a five-day closure, which impacted Star’s Gold Coast casino performance. The closure brought about by the cyclone knocked about A$3 million off EBITDA of Star’s Gold Coast casino. “We are working hard on re-establishing those customer relationships and reactivating some customers who are not coming to The Star anymore because they don’t like that combination of impacts,” McCann said.
Bally’s rescue package
Last week, the casino operator agreed to take a A$300 million lifeline from US casino group Bally’s Corporation. The agreement would see Bally’s take control of the operator. Star’s latest update revealed that its largest individual shareholder Bruce Mathieson’s Investment Holdings has agreed to invest A$100 million in the operator, leading to a reduction in Bally’s contribution to A$200 million. Previously, the arrangement was that Bally’s would invest at least A$250 million of the total amount.
This deal became a top priority for Star Entertainment after a failed attempt to refinance nearly AU$1 billion in debt. Star had announced that it was exploring a lifeline from Bally’s after it had “not received a binding debt commitment letter” from Salter Brothers Capital, leading to the withdrawal of its AUD940 million refinancing proposal. Bally’s set to take control of 56.7 percent of the company—pending a shareholder vote in June. Board members of the casino have recommended investors to vote in favour of the deal in absence of a superior offer.
