Australian casino operator Star Entertainment Group has announced its full year results for FY23 showing a net loss of AU$2.44 billion ($1.57 billion/€1.45 billion) for the reporting period.
Results heavily impacted by regulatory actions
Despite the overall net loss, Star reported improved revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) that were higher than previously announced guidance. The report reveals a 22% year-on-year increase increase in gross revenue to AU$1.87 billion ($1.20 billion/€1.11 billion) and a 34% increase in EBITDA to AU$317 million ($204 million/€188.7 million).
According to the announcement, the company’s overall profits were heavily impacted by regulatory action taken against Star following inquiries into operations at its properties in both New South Wales and Queensland.
In October of 2022, Star was fined AU$100 million ($69 million/€64 million) for license breaches that included allowing money laundering to take place at its Sydney casino.
Star FY23 key highlights
- Normalised FY23 EBITDA slightly above previously announced guidance
- Non-cash impairment for FY23 of AU$2.17 billion ($1.40 billion/€1.29 billion)
- Legal costs for year amounted to AU$595 million ($383 million/€354.3 million)
- Debt restructuring costs of AU$54 million ($35 million/€32.1 million)
- redundancy costs of AU$16 million ($10.3 million/€9.5 million)
- Expected impact from NSW casino duty rate projected as AU$10 million ($10.3 million/€5.9 million) in FY24
- Stable performance – early H1 FY24 indicates trading broadly in line with Q4 FY23
Star noted that its Sydney property continues to be impacted by an increase in numbers of excluded guests as a result of tighter controls and operating restrictions while the opening of Crown Sydney has also led to increased competition. However, despite these obstacles, gross revenue at The Star Sydney grew by 26% year-on-year to AU$984 million ($633 million/€586 million) while EBITDA by 57% to AU$127 million ($82 million/€75.6 million).
Reporting on The Star Gold Coast, the announcement revealed that FY23 revenues were impacted positively by the return of tourism. Both revenue and EBITDA grew by 20% year-on-year to AU$509 million ($327 million/€303.1 million) and AU$107 million ($69 million/€63.7 million) respectively.
Meanwhile Treasury Brisbane saw a revenue increase of 15% to AU$375 million ($241 million/€223.3 million) while EBITDA grew by 29% to AU$83 million ($53 million/€49.4 million).
Speaking of the report Star CEO and Managing Director, Robbie Cooke said:
“To say it has been a challenging year completely understates the lived experience at The Star over the last 12 months. 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.”
Image credit: llee_wu / CC BY-ND 2.0
Ciaran has been working within the Gambling Industry as a deep analyst since 2019. His deep knowledge and understanding of all the gambling regulations, and processes makes him a true asset, and an always valuable point of view for Gambling Industry News, allowing us to cover every topics from a brand new perspective.