Star Entertainment Publishes H1 FY25 Report as Challenges Continue

The Star Entertainment Group has published its financial report for the first half of the fiscal year (H1 FY25), highlighting its continued financial trouble.

The company, which recently agreed to give control to Bally’s, hopes to turn the tables soon.

The Company’s Revenue Declined

In the first half of the year, The Star reported AUD 650 million, ($414 million) down 25% year-on-year. The company noted that this reflects challenging trading conditions due to the ongoing casino reforms in Australia.

The company reported EBITDA loss of AUD 26 million ($16.6 million) for the same period. The EBITDA margin for H1 FY25 stood at -4.1%, down from 13.1% in the prior-year period.

The company’s operating income (EBIT) for H1 decreased to a loss of AUD 57 million ($36.6 million). This marks a drastic decrease from AUD 51 million in the first half of FY24. The company’s operating expenses also decreased to AUD 522 million ($332.5 million), driven by the closure of Treasury Brisbane, among other things.

The company reported significant items of AUD 166 million ($105.7 million), which include impairment of its investment in DBC, debt refinancing costs, fines and penalties and underpaid duties, among other costs.

In terms of liquidity, the company announced that it had AUD 98 million ($62.4 million) in available cash as of April 11.

The Star’s trading performance continued to deteriorate during the first half of the year due to regulatory challenges and tough trading conditions. The company reported that monthly trading in Q2 has stabilized on a year-to-date basis.

The Star’s Journey to Recovery Continued

In the meantime, The Star listed some of its achievements, including the achievement of the previously announced AUD 100 million ($63.7 million) reduction in annualized cost savings. The company added that it is diligently working on embedding its costs savings and identifying additional areas of potential incremental cost-out.

Additionally, The Star continues to be impacted by uneven competitive environments. It explained that pubs and clubs continue to have a negative effect on its performance.

The Star furthermore highlighted the recent execution of a binding term sheet with Bally’s, as well as a binding commitment letter with Investment Holdings, for an AUD 300 million ($191.1 million) strategic investment into The Star.

Under the agreement, Bally’s will invest AUD 200 million ($127.4 million) in the Australian company. Investment Holdings, on the other hand, plans to invest another AUD 100 million ($63.7 million). This deal will provide The Star with some financial stability in the wake of its failed agreement with Salter Brothers. The Star hopes to secure shareholder approval by the end of the month and close the deal by the end of June.

At the same time, The Star’s search for additional sources of liquidity continues. The company is also proceeding with its remediation plan following the second Bell Review, which found that The Star is still not suitable to hold a license.