Star Entertainment reports $1.7b FY loss
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The news: Star Entertainment reported a fall in revenue and earnings for the 2024 financial year, but reduced its net loss, as the casino operator said it expects to respond to the NSW casino regulator's 'show cause' notice on Friday.
The numbers: The Star reported a statutory loss after tax of $1.69 billion, a 31% improvement on a loss of $2.44 billion in FY23.
However, the casino operator saw revenue fall 10% year on year to $1.68 billion while EBITDA fell 45% to $175 million.
Significant items of $1.7 billion, net of tax, recognised during the period primarily reflected a non-cash impairment charge of $1.44 billion.
The Star said trading performance deteriorated over the second half of FY24, and this trend has continued into the beginning of FY25.
For the months of July and August, The Star incurred an EBITDA loss of $6.6 million and $1.1 million respectively.
The context: The Star said its $1.44 billion impairment charge has arisen from the impact of "challenging trading conditions as well as various recent and upcoming regulatory changes" which are expected to negatively impact the earnings of the business.
Monthly operating expenses trended up through the second half of the financial year, it said, driven by an increase in ongoing transformation and remediation related activities offsetting The Star's previously announced cost reduction program.
On Wednesday, the company confirmed that its existing $450 million debt facility has been reduced to $334 million, while lenders have agreed to provide a new facility of up to $200 million.
The Star's shares have been suspended from trading on the ASX since 2 September after the company failed to lodge its full-year results last month.
What they said: The Star CEO Steve McCann, whose appointment is subject to regulatory approval, said: "There are a number of significant challenges currently facing the business from an earnings, liquidity and balance sheet perspective.
"We recognise and appreciate the support provided to date by our stakeholders as The Star puts in place a new management team and strategy to implement a remediation and transformation program, and return the company to a more sustainable footing.
"We have identified a range of initiatives to improve business performance and cashflow, as well as providing the organisation with additional liquidity.
"However, time and flexibility is required to implement these initiatives."
The source: ASX announcement
