Australia’s Star Entertainment Group has announced a net loss of AU$2.44 billion (US$1.57 billion) for the year ended 30 June 2023, heavily impacted by regulatory action taken against it in the wake of inquiries in New South Wales and Queensland.
It did, however, announce vastly improved revenue and EBITDA results that it described as being above previously announced guidance. This included a 22% year-on-year increase in gross revenue to AU$1.87 billion (US$1.20 billion) and a 34% increase in EBITDA to AU$317 million (US$204 million).
The AU$2.44 billion loss was entirely off the back of significant items, namely AU$2.17 billion (US$1.40 billion) in non-cash impairment at The Star Sydney and The Star Gold Coast, ongoing regulatory and legal costs of AU$595 million (US$383 million), debt restructuring costs of AU$54 million (US$35 million) and redundancy costs of AU$16 million (US$10.3 million).
On a pure performance level, Star reiterated that The Star Sydney continues to be impacted by various factors including an increase in the number of excluded guests amid tightened controls, operating restrictions that negatively impact the guest experience, competition from the launch of Crown Sydney and weaker consumer discretionary spending. Despite this, gross revenue at The Star Sydney grew by 26% year-on-year to AU$984 million (US$633 million) and EBITDA by 57% to AU$127 million (US$82 million).
At The Star Gold Coast, FY23 began strongly as domestic tourism rebounded but softened late in the year once international travel picked up again. Revenues and EBITDA at the Gold Coast property both increases by 20% year-on-year to AU$509 million (US$327 million) and AU$107 million (US$69 million) respectively.
It was also a similar story at Treasury Brisbane – soon to be absorbed into the Queen’s Wharf Brisbane development – where gross revenue was up 15% to AU$375 million (US$241 million) and EBITDA by 29% to AU$83 million (US$53 million).
“To say it has been a challenging year completely understates the lived experience at The Star over the last 12 months,” said Star CEO and Managing Director, Robbie Cooke. “The consequences flowing from the damage to our social license are felt daily by team members on multiple levels, reinforcing the critical need to understand the privilege and responsibility that comes with holding a casino license. The ancillary challenges that have arisen in the year, and there are many, all follow from the breaches of trust identified in the Bell and Gotterson reports.
“As a team we are determined to earn back the trust and confidence of our community including our regulators, governments, shareholders, employees and guests. We fully understand the responsibility involved in holding our licenses and are committed to transforming our leadership and culture. This journey has started and we know there is still a lot to be done.
“Remediation is our number one priority. We have commenced the uplift in our risk management, safer gambling and AML capability and are starting to embed greater accountability and more robust governance. We have invested in enhancing our control environments and are operationalizing and embedding these controls. We are improving our financial crime management and our overall approach to harm minimization. Our remediation program will track and hold us accountable to the multi-year program we are committed to delivering.”
