As the casino operator reflects on its performance for the year ending June 30, 2021, Star Entertainment Group has announced that the group’s domestic locations have helped to offset declining VIP income.
The group’s overall revenue, which is made up of its three domestic properties, Treasure Brisbane, Star Sydney, and Star Gold Coast, fell 11 percent to A$155 million as a result. EBITDA increased by 51 percent to A$427 million, bringing net profit after tax to A$58 million.
Property closures, operating restrictions, and border closures due to COVID-19 had a significant impact on revenues throughout the group’s properties.
Sydney was the most severely impacted of the three locations, with a 30 percent decline in revenue to A$832 million. Domestic operations fell 10 percent to A$813 million, whereas VIP fell 96 percent to A$12 million. EBITDA fell 26 percent to A$204 million.
The Gold Coast closed 28 percent lower at A$382 million, thanks to a 26 percent increase in domestic income to A$379 million, with VIP revenue nearly wiped out after plunging 100 percent to A$1 million. EBITDA increased by 17 percent to A$112 million.
Domestic gaming income
Domestic gaming income increased 18 percent in the second half of the year compared to the same period last year, with slots and tables up 22 percent and 13 percent, respectively.
Despite its VIP section plummeting to nil, Brisbane’s performance ended up at A$348 million, a 34 percent rise year on year.
Star’s chair, John O’Neill, explained: “The group continued executing its strategy well in the context of the extraordinary COVID-19 related challenges. The fundamental earnings prospects for The Star’s domestic business remain attractive.
“They are underpinned by valuable long-term licences in compelling locations and the transformation of our properties into globally competitive entertainment destinations is nearing completion.
“The Star remains committed to maintaining a balance sheet that positions the group for the post COVID-19 recovery. The board has not declared a final dividend for FY2021 given the continuing impacts of COVID-19 on the business and, consistent with the June 2020 covenant waiver, cash dividends cannot be paid until gearing is below 2.5 times.”
Following the end of the reporting period, Star provided an update on the group’s prior performance, stating that property closures and operational restrictions had a detrimental impact on trading.
The Star Sydney shuttered on June 25, 2021 and is still closed, with Queensland properties closing for three days on June 30, 2021 and reopening with operational limitations, such as one person per square metre required mask use and clients having to be seated while eating or drinking. These were turned off for a second time on July 31, 2021, for an eight-day period.
In the future, the company claims it will focus on completing ongoing projects: “Execution of our long-standing growth strategy continues to plan over FY2021,” according to Matt Bekier, MD and CEO of Star.
“Comprehensive actions to mitigate the impact of COVID-19 were implemented, safeguarding staff and customers. The properties reacted expediently to the many changes to operating conditions throughout the period.”
Adding: “The experience last year has demonstrated how resilient our business is and how quickly customers return when our properties are allowed to open. This gives us great confidence as vaccination levels increase and a return to normality approaches.
“We would like to thank all of our guests and staff who stayed with us through the difficult times last year and look forward to welcoming them back soon.”