Star Entertainment shares surge on swing to profit
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More news: Star Entertainment shares surged 7.29% to $0.51 by 12:58pm AEDT, after the company swung to profit for the first six months of the financial year.
The company reported a statutory profit of $9.1 million compared to a massive $1.3 billion loss a year ago. However, revenue slipped 14.6% to $865.7 million.
Star Entertainment swings to first-half profit while revenue falls
The news: Casino operator Star Entertainment Group has swung to a first-half profit but regulatory controls and a weaker economic environment have weighed on earnings.
The numbers: It reported a statutory profit of $9.1 million compared to a massive $1.3 billion loss a year ago. However, revenue slipped 14.6% to $865.7 million.
Profit excluding significant items dropped 43% to $25 million, ahead of analyst expectations. It will not pay any dividends, in line with debt arrangements.
The context: The company said the weaker result reflected lower revenue from premium gaming areas as well as operating restrictions that affected the performance of electronic gaming machines.
It also attributed the profit decline to softness in discretionary spend in its key Sydney market as well as competition from larger rival Crown.
Star is facing a second inquiry into its suitability to operate casinos in NSW as well as other regulatory challenges in Queensland. It is also in the midst of refinancing project debt for its Queens Wharf development in Brisbane.
What they said: “Remediation remains our number one priority. We continue to uplift our risk management, safer gambling and AML capabilities and are starting to embed greater accountability and more robust governance,” CEO Robbie Cooke said.
The source: ASX announcement
