The Star Entertainment Group declared a total income of A$419.2 million (£218 million/€255 million/$271.5 million) in its third-quarter financial summary for the period concluding on March 31. This represents a 4.6% decline in comparison to the same timeframe last year.
The Star has not yet unveiled its complete third-quarter financial results, but has offered some specifics on key aspects of its operations.
The Star’s third quarter was marked by upheaval. In February, the Independent Casino Commission of New South Wales declared a second investigation into The Star, following the well-known Bell Report. The investigation, referred to as “Bell Two,” commenced on February 19 and will continue until May 31.
On the day the second investigation was announced, The Star requested that its shares be temporarily halted from trading on the Australian Securities Exchange.
The initial Bell Report uncovered substantial shortcomings in anti-money laundering measures and social responsibility at The Star Sydney and proposed 30 steps to enhance practices. A year after the initial report was released, a review indicated that The Star had implemented 22 of the 30 recommendations.
The second investigation will concentrate on The Star’s organizational culture, as well as examining the effects of the first Bell Report.
The financial summary provides details on the company’s financial performance and the ongoing investigations.
During the third fiscal period, the corporation’s high-end gaming area income experienced a downturn in comparison to the same timeframe the previous year. This pattern was observed across the entire sector – Star Sydney’s high-end gaming area income dropped by 19.3%. The Gold Coast Star witnessed a reduction of 20.0%, while the Brisbane Treasury encountered a decline of 28%.
However, the primary gaming hall earnings witnessed an uptick. The Sydney Star saw an increase of 5.4%, the Gold Coast Star by 4.6%, and the Brisbane Treasury by 6.4%. Nonetheless, the Star confirmed that the decrease in high-end gaming area revenue resulted in a 4.6% reduction in total earnings across all three locations.
Total gaming tax revenue for the quarter amounted to A$105 million, a decrease of 2.9% compared to the third quarter of 2023. Tax revenue was highest in January, reaching A$37.1 million. The Star’s net revenue was also highest in January, reaching A$146.6 million.
However, operating expenses were highest in March, reaching A$97.1 million. Total operating expenses for the quarter amounted to A$276.3 million, an increase of 4.2%. The Star attributed this to increased resources in its risk, control, and transformation teams.
Normalized earnings before interest and taxes (EBIT) amounted to A$37.9 million. This represented the largest decline for the quarter, decreasing by 11.5%. Normalized EBIT, on the other hand, showed a different picture, reaching A$9.3 million, a significant improvement from the A$6 million loss recorded in the same period last year.
After significant items before tax (resulting in a A$10.8 million loss), the net loss after tax was A$6.8 million. This was a positive outcome compared to the A$49.7 million loss recorded in the third quarter of 2023.
Difficult times are approaching.
One month after the introduction of Bell 2, in March, Star Entertainment Group’s chief executive officer Robbie Cook and chief financial officer Christina Cassibba stepped down. David Foster was named as temporary executive chairman, while the hunt for a new CEO continues.
Star Entertainment Group has encountered difficulties in finding a suitable chief executive. Cook assumed the position in November 2022, marking the company’s fourth CEO in a single year. Before him, Matt Bekier, John O’Neill, and Jeff Hogg held the position.
Bekier resigned during an investigation into Star Sydney in June 2021.
In recent years, Star Entertainment Group has also faced numerous ongoing regulatory obstacles. In October 2022, the company was deemed “inappropriate” to hold a license in Queensland. Subsequently, Star Entertainment Group’s license in the state was temporarily halted and the company was instructed to pay a $100 million penalty. Star Entertainment Group’s license in New South Wales was also temporarily halted indefinitely in October 2022. Moreover, the company was instructed to pay a $100 million penalty.
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