Home NewsSports Betting Star makes a net profit, despite a 14.6% drop in revenues

Star makes a net profit, despite a 14.6% drop in revenues

94 views 6 minutes read

Star Entertainment reported a decrease in revenue for the group but still managed to turn a profit.

Revenue fell 14.6% to AU$865.7m (PS445.4m/EUR520.7m/US$564.3m) in H1 at Star. Star’s revenue fell 14.6% to $865.7m (PS445.4m/EUR520.7m/US$564.3m) in H1.

In H1 2023, the large losses were caused by the writedown of the casino values in Sydney and Gold Coast. The venues and casinos were cited for a number of failures in anti-money laundering, social responsibility and other areas.

Recent news has cast some doubt on its future. While Star appeared to be recovering somewhat during H1 2024, there are recent reports that have raised questions about the company’s recovery. The Independent Casino Commission of New South Wales (NICC), confirmed this month that a second investigation into Star has been launched.

The inquiry will run for 15 weeks and the final report is due on 31 May. Adam Bell SC will be the lead investigator, examining how Star implemented the recommendations of the previous inquiry. After the first investigation, Star was declared ineligible to hold a New South Wales casino license in September 2022.

Mixed results from delayed H1 results

Star delayed its announcement of H1 results due to this announcement. This was pushed to today, 29 February. The results are mixed, but CEO Robin Cooke said that Star has achieved several important regulatory milestones during H1.

Cooke stated that “Star has accomplished a number significant milestones during this period, despite the challenging regulatory environment in which the group operates.” Our remediation plan has been approved by Queensland. Our Sydney casino property is now in a much better position after the NSW Casino Duty Rates were resolved. This has also protected our New South Wales team and thousands of jobs.

“Despite these accomplishments, much more work remains to be accomplished.” Our number one priority is remediation. “We are continuing to improve our AML, risk management and safer gambling capabilities. We also want to introduce greater accountability.”

Star works to restore player confidence

Cooke claims that these efforts are part of a larger effort to restore player confidence after the initial inquiry revealed failures. Cooke says that Star is still working on the issue, and has progressed.

Star will continue to work closely with the authorities and welcome the new inquiry, he says.

Cooke stated that “despite the challenges we have faced over the last 18 months as a group, we continue to progress and do everything we can to regain our trust and restore suitability.”

As a team, we’re committed to our ‘North Star,’ which is our strategy to achieve sustainable results for our guests and team members. We also want to provide entertainment, gaming and leisure activities in a responsible and ethical manner.

We welcome the NSW inquiry to help the NICC determine what action, if any it should take, in relation to Star. The inquiry is an opportunity for Star to show that it can return to its former level of suitability in NSW, with a particular focus on the measures taken since the Bell Report was released.

All Star hotels experience a drop in revenue

Star’s revenue in H1 was 683.3m, a significant amount. This was still 16.7% lower than the $820.2m reported in the first six months of 2023.

Domestic gaming revenues are 16.7% lower than $820.2m in h2 2020

The non-gaming revenues also declined, falling 5.6% to 176.4m. Other revenue also fell 3.2%, to $6.0m.

Star’s three casinos saw revenue declines at every location. Star Sydney, with its $450.0m in revenue, was the main site of Star again. However this is 16.9% less than last year. This was attributed to the new regulations and measures for responsible gambling at Star Sydney Casino, along with weaker consumer expenditure.

Star Gold Coast’s revenue dropped by 13.6%, to $238.1m. Star Gold Coast said that this is due to a normalisation in consumer spending, after the benefits of the post-Covid surge of 2023. The company also noted that the Treasury Brisbane’s environment needed to be improved in order to accommodate its corporate-wide changes.

The revenue of the Treasury Brisbane fell 9.6%, to $177.6m. Star again highlighted the new controls but noted also that the visitation to the area is still low after the pandemic. It also said that increased competition by larger pubs, clubs, and other venues who underwent renovations, implemented loyalty programs, and engaged in more promotional activities saw a shift in market share.

Spending reduced results in a return to profitability

Spending was lower in all areas. Gaming tax and levies expenditure fell by 13.6%, or $510.5m. Operating costs were down 5.0% at $541.6m. The amount of depreciation, amortisation and other costs was down by 38.3% at $62.2m.

The increase in profits before tax and interest was 48.0%. Star noted other financials including $18.6m of net funding (down 44.6%) and $3.7m net profit by an associate.

ebitda for h1 2024 fell 43.1% to $113.6m

Star had to pay $11.5m tax. This left a net income of $25m, before major items. That’s a 42.7% drop from the $43.6m it made in 2023. After accounting for $11.5m of significant items (compared to the $1.3bn written down in the prior year), the bottom line was very different.

Statutory net profits after taxes were $9.1m compared with $1.26bn in 2023. EBITDA (before significant items) fell by 43.1%, to $113.6m.

What has Star done with H2?

Star’s H2 revenue and EBITDA are largely consistent with the H1 figures and have only been slightly lower than last year.

In January, the group EBITDA rate was $20.0m. In January, the group EBITDA fell 6.5%. EBITDA also decreased across its three casino properties.

Cooke said that the revenue and earnings have continued to follow our half-year run rate.

You may also like

About Us

On iGamingWorld, we provide in-depth analysis, the latest news and opinions from famous people of the gaming industry.

Featured Posts