The Star Entertainment Group announced its full financial year ending June 30 results, focusing on the pre-pandemic period. The Group posted just under AUD$1.5 billion in net revenue, a 31% decline from the previous fiscal year.
The casino operator reported earnings before interest, tax, depreciation and amortization (EBITDA) of AUD$282 million, 49% drop from the previous year, resulting into a net loss of AUD$94.6 million, nearly 150% down from 2018-2019 fiscal year.
“The Group continued executing its growth strategy despite an unprecedented environment.”John O’Neill, Chairman, Star Entertainment Group
The Group managed to deliver record earnings for the period July 2019-February 2020, Star’s chairman outlined, envisaging the period before the virus outbreak, avoiding talk about the closure months.
Clear Division Pre-COVID and Full Fiscal Year
Casinos in New South Wales (NSW) were ordered to temporary close business amid the violent spread of the virus infection mid-March and were not allowed to re-open until June. Unfortunately, only a month after re-opening, Star Casino in Sydney announced it would roll back restrictions, to comply with the new order from the Government in NSW.
“Whilst acknowledging the impacts of COVID19 have been extraordinarily challenging, the fundamental earnings prospects for The Star remain unchanged, underpinned by valuable long-term licences in sought after destinations.”John O’Neill, Chairman, Star Entertainment Group
For its Sydney operations, the Star’s 2019-2020 fiscal report centred around solid growth in earnings on flat revenue pre-pandemic, with growth accelerating from the first quarter of 2020 into January-February and operating expenses for the period down 1.7% and VIP business broadly stable before the virus outbreak.
For the performance in Queensland (Gold Coast and Brisbane), the Start Entertainment Group highlighted its very strong normalized earnings growth pre-pandemic, again accelerating from H1 2020 into January-February 2020, and operating costs being well managed.
“Major projects at Queen’s Wharf Brisbane and The Star Gold Coast are proceeding to plan, with the upgraded and expanded Sovereign at The Star Sydney delivered on time and budget. The Star delivered record normalised and domestic earnings for July 2019 to February 2020 on a pcp basis before the full impact of COVID19. This reflected growth from investments, operational improvements and cost management benefits.”John O’Neill, Chairman, Star Entertainment Group
Regarding its VIP rebate business, the Star noted its credible performance during challenging market conditions pre-pandemic, with continued diversification into international premium players, 25.3% increase in turnover with unusually low actual win rate of 0.69%.
“Initial response by our highest value domestic customers to the new Sovereign in Sydney since its July 2020 opening has been pleasing.”Matt Bekier, Managing Director and CEO, Star Entertainment Group
Pointing out the earnings growth pre-pandemic as evidence for strength, the company’s CEO further stated that the business was fundamentally strong, and the long-term value from investments in network of integrated resorts and continuing operational improvements would drive visitation and keep earnings substantial.