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The perfect storm has taken its toll on The Star Entertainment Group’s (ASX: SGR) March-quarter earnings which saw a near tripling of the group’s underlying loss to $21 million compared to the previous three months.
The Star, which has been hit by weak consumer sentiment, mandatory carded play at its Sydney casino and the impact of Cyclone Alfred in Queensland, suffered a further deterioration of its earnings performance despite cutting costs to stem the bleeding.
The EBITDA loss in the latest quarter is up from a $9 million loss in the December quarter and down from a $38 million profit in the third quarter of FY24.
Year-on-year revenue slumped 35 per cent to $271 million in the March quarter, while revenue is also 9 per cent down on the December quarter.
Revenue at The Star Gold Coast fell 13 per cent on a quarterly basis due to softer trading conditions and the five-day closure of the property due to Tropical Cyclone Alfred.
The Star Sydney's revenue was also down 8 per cent, which the group says reflects a seasonal softening.
However, the Sydney property has been hit hard by mandatory carded play and cash limits since these measures were introduced on 19 October 2024.
The casino group reports daily revenue has fallen 17 per cent to 31 March 2025, compared to the four-week daily average prior to 19 August 2024 when the first stage of these reforms was implemented.
The Star Gold Coast remains the group’s only positive contributor to underlying earnings with an EBITDA profit of $2 million record in the March quarter, which compares with EBITDA losses of $13 million and $9 million respectively recorded by The Star Brisbane and The Star Sydney.
“The results for the period reflect a seasonal softening in revenues, reduced levels of gaming visitation and the one-off impact of adverse weather events driving property closures in Queensland in March 2025,” says The Star.
The Brisbane-based casino group says operating expenses were cut by 3 per cent to $7 million compared with the December quarter due to lower corporate costs and “volume-related reductions”.
The Star Brisbane received a $10 million operator fee for the quarter from The Star’s Destination Brisbane Consortium which developed the $3.6 billion Queen’s Wharf project.
The managed integrated resort generated revenue of $98 million during the quarter but delivered an EBITDA loss of $1 million – a result impacted by Tropical Cyclone Alfred.
The Star reports it is progressing previously announced plans to exit its 50 per cent interest in the Destination Brisbane Consortium in order to consolidate its interests on the Gold Coast.
The deal remains subject to long-form documentation with its Hong Kong partners Chow Tai Fook Enterprises and Far East Consortium, which previously had been expected to be completed by the end of April.
Once finalised, the deal will relieve The Star of any further equity contributions to the consortium, with the group already banking $45 million in cash from the sale.
Despite The Star securing a $300 million investment from US casino giant Bally’s Corporation and major investor Bruce Mathieson in the form of a convertible note and subordinated debt instrument, The Star reiterates today that “there remains material uncertainty regarding the group’s ability to continue as a going concern”.
The Star had available cash of $44 million at the end of March this year, down from $78 million on 31 December 2024.
While The Star finalised the $60 million sale of the Sydney Event Centre earlier this month, proceeds of about $58 million are being held in escrow as prescribed by the NSW Independent Casino Commission pending shareholder approval of the Bally’s debt deal.
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