Australia’s Star Entertainment Group reported an 8.4% year-on-year decline in net revenue to AU$1.05 billion for the six months to 31 December 2019, with a steady performance across all segments negatively impacted by bad luck in VIP.
Star’s results were again largely driven by the domestic market, where gaming revenue grew 1.7% to AU$862.3 million on gains at both flagship property The Star Sydney and at its Queensland properties in Brisbane and the Gold Coast.
International VIP also showed some resilience in the face of a challenging global gaming market, with turnover up 2.0% over the same period in 2018. Star said that a decline in unique VIP customers was offset by higher spend per customer, however an extremely low 0.73% win rate resulted in VIP revenue falling 54.2% year-on-year to AU$154 million.
As a result, group-wide EBITDA fell 26.5% to AU$243 million and net profit by 48.5% to AU$77 million.
At The Star Sydney, gross revenue fell 4.3% to AU$768 million with a slight increase domestically to AU$628.5 million contrasted by a 13.8% fall in VIP to AU$139.5 million.
Queensland properties were more directly impacted by bad luck, with gross revenue falling 23.3% to AU$408 million but up 10.9% to AU$516 million on a normalized basis. The Star Gold Coast contributed domestic revenue of AU$212.2 million and VIP revenue of AU$11.7 million, with Brisbane adding AU$180.8 million domestically and AU$2.9 million in VIP.
“The Group continues to execute its growth strategy over the half, with all major projects proceeding to plan,” said Chairman John O’Neill.
“We delivered record Group normalized and domestic earnings, reflecting revenue growth from investments and the cost benefits from the organizational restructure, offsetting declines in our International VIP Rebate business.”
Star also provided a trading update through the first seven weeks of 2020 in which time domestic visitation has been impacted by multiple factors including the recent Australian bushfire crisis and the coronavirus outbreak.
On the coronavirus, Star said that Sydney has felt the majority of the impact with inbound visitation continuing to be limited by border closures.
Despite this, VIP volumes are up year-on-year as Star focuses on customers not affected by travel restrictions. It added though that “true comparisons are difficult given the short time period and the impact of the coronavirus. Going forward, impact will depend on the length of border closures and speed of market recovery.”
