Published by Uma Rajagopal
Posted on November 28, 2024
(Reuters) – Embattled casino operator Star Entertainment closed 7.1% lower on Thursday, hitting an all-time low of A$0.195, as it flagged challenging operating conditions, near-term liquidity challenges and deteriorating earnings.
Australia’s No.2 casino operator has been in the eye of a perfect storm that has hit Australian casino operators for years, with Star and Blackstone-owned larger rival Crown Resorts being engulfed by multiple regulatory inquiries as well as a drop in tourist visits and lengthy closures.
The stock has lost more than 50% since Sept. 27, when it resumed trading after being suspended for more than three weeks by the Australian bourse operator following its failure to lodge its financial results for fiscal 2024 by the required due date.
Star posted unaudited earnings before interest, tax, depreciation, and amortization (EBITDA) before items in the negative on Thursday. It posted an EBITDA loss of A$8.5 million ($5.51 million) for October, taking its loss for the first four months of fiscal 2025 to A$27 million.
“We have a difficult road ahead and The Star remains in an extremely challenging position,” it said in a statement, adding that its revenue continues to decline while costs of the external advice required to meet regulatory standards remain at elevated levels.
Last month, the company swung to a first-quarter loss and reported a drop in revenue, as a result of restrictions implemented in March such as mandatory carded play and cash limits.
The New South Wales state gaming regulator said in October that Star will be able to keep its struggling Sydney casino open but has been ordered to pay a fine of A$15 million.
Over the last few years, Star has been hit with two regulatory inquiries, lost its CEO and chairman and has hovered near bankruptcy.
($1 = 1.5423 Australian dollars)
(Reporting by John Biju in Bengaluru; Editing by Abinaya Vijayaraghavan)
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