The Star Entertainment Group announced a significant net loss for the fiscal year ending June 30th. The company reported a loss of almost AU$1.69 billion, about $1.16 billion. This financial setback comes after The Star decided to lower the value of its venues. They cited tough trading conditions as a reason for this decision. Additionally, recent changes in regulations are expected to hurt their earnings further. The company is facing a challenging environment that has affected its financial performance.
The Impact
The Star Entertainment Group has suggested that it sell some assets to raise cash. This comes as the company faces liquidity issues due to current trading levels, ongoing remediation efforts, and regulatory expenses. Although the company reported a large loss, it is actually an improvement from last year. In the previous financial year, The Star had a loss of AU$2.44 billion, or about $1.68 billion.
However, the company continues to face regulatory scrutiny. Authorities are particularly focused on its corporate culture and governance practices. The Star admitted that its trading performance declined in the second half of the fiscal year, and this downward trend has continued into the current year. According to its unaudited preliminary financial report, The Star’s revenue for the year was AU$1.68 billion, or $1.16 billion. This is a decline of 10.2 percent compared to the previous year.
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also dropped by 45 percent to AU$174.7 million, or $120.2 million. To improve its liquidity, The Star Entertainment Group mentioned that it would need additional equity contributions for the Queen’s Wharf Brisbane project. The company is also looking into selling non-core assets. This includes the remaining Treasury venue assets, which are valued at over AU$300 million, or $206.4 million.
A Series of Sale Outs
The Star Entertainment Group recently sold its leasehold interest in the Treasury Casino building in Queensland for AU$67.5 million, which is about $46.3 million. This sale happened just days before the opening of The Star Brisbane, but the Treasury Brisbane hotel is still open for business.
The company is currently in the process of selling the Treasury hotel and car park. They expect these sales to be completed in the second half of fiscal 2025. Additionally, The Star has identified around AU$100 million, or $68.8 million, in annual cost savings. These savings are expected to be put into action by March 2025.
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