February 19, 2021 3 min read

The Star’s Half FY2021 Performance Impacted by Restrictions

The Star Entertainment Group announced in a filing to the Australian Stock Exchange (ASX) its report for the half financial year 2021 ended December 31, 2020, posting statutory revenues of AU$741.4 million.

Material Impact on the Business

The 29.6% slump in revenues was mainly due to the casino property closures and coronavirus-induced restrictions on the business, including limits on capacity, physical distancing and shutting down of international borders.

Due to the closing of international borders, the Star accounted for a 97% drop in the VIP segment, and consequently, the measure which reflects revenues by removing win rate volatility for VIP customers, normalized revenues, indicated even bigger decrease compared to the previous six-month period, 35.2%, to AU$733.1 million.


Location by location, the casino operator reported a significant impact on earnings in Sydney due to the operational restrictions on the business, which had to reduce capacity to 300 patrons per area. Normalized earnings before interest, tax, depreciation and amortization (EBITDA) came out at AU$107 million, 44% down compared to the previous six-month period.

Part of the slump in EBITDA was offset by managing operating expenses which were cut down by 45% to AU$176 million.

Gold Coast

On the Gold Coast, the casino operator reported normalized EBITDA of AU$51 million, down 20%, mainly due to the impact of the absence of VIP international business. EBITDA from domestic customers came out flat at AU$53 million, but The Star managed to achieve improved margins from 25.1% to 31.1%.

Border closures and shutdown of non-gaming amenities impacted earnings, but slots managed to post 8% growth due to a surge in the vertical in December. Operating expenses were cut down by 39% for the reported six-month period.


In Brisbane, the group achieved a record normalized EBITDA of AU$68 million, up 29%, despite the 3% drop in revenue. Domestic EBITDA posted even higher increase, 34%, to AU$69 million, paired with improved trading margins from 28.5% to 38.2%.

The location experienced a lesser impact from the drop in international business and shutdown on non-gaming amenities, and also managed to post growth in slots, 7%. The Star managed to drive down operating costs by 21%.

Balance Sheet

The Star reported a reduction in its net debt during the period by AU$151 million, as well as a successful full waiver negotiation of debt covenants for December 2020 testing date and an amendment of the covenant ratios for the June 2021 testing date. During the six-month period, capex was down 65% to AU$54 million, and remains on plan for the AU$100 million full year target.

Second Half FY2021 Outlook

In its trading update and second half year outlook, the casino operator noted that performance continued to be impacted by operating restrictions, yet all three properties experienced positive domestic demand conditions.

The Star reported it continued to manage well operating costs with the overall margin in EBITDA in January in line with the period prior. It also warned operating restrictions may change and significantly impact performance.

Lead Author

With 4 years experience as an analyst, Julie—or ‘Jewels’, as we aptly refer to her in the office—is nothing short of a marvel-worthy in her attention to the forex and cryptocurrency space as she quickly became the first pick to co-pilot education to the masses with Mike.

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