Australia's Star Entertainment posts multi-billion-dollar loss, mulls asset sales

By Archishma Iyer

(Reuters) -Star Entertainment posted its second consecutive annual loss worth multi-billion dollars as it wrote down the value of its venues, and said it might offload assets to raise cash, underscoring the precarious state of Australia's casino sector.

The country's second-largest casino operator flagged near-term liquidity needs for group operations at current trading levels, ongoing restructuring activities and outflows regarding regulatory matters.

"The Star continues to review the potential sale of other non-core assets, which together with the remaining Treasury assets have an estimative value of more than A$300 million," the company said in a statement on Thursday.

The beleaguered firm recently said it would sell a stake in the Treasury Brisbane Casino building in Queensland for A$67.5 million ($46.32 million). It had A$130 million in cash, as of August-end.

Star secured on Wednesday a two-tranche debt lifeline of up to A$200 million, with an immediate A$100 million injection to deal with cost blowouts the gaming group is facing at its new Queens Wharf resort in Brisbane.

Its annual statutory net loss after tax narrowed to A$1.69 billion from A$2.44 billion in the prior year amid challenging trading conditions and weaker spending.

The company did not declare a final dividend, consistent with the previous corresponding period.

"It will be a tough time ahead. Australians have depleted their savings and the ratio of savings to net income has hit a new low," said Jessica Amir, a market strategist with trading platform Moomoo.

"If Star doesn't see Chinese nationals (who used to account for most of its revenue) return and prop up its business... the market will seriously question how Star can sustain this interest rate, which some would see as a junk bond interest rate," she said, referring to the debt package Star secured on Wednesday.

Star said its trading performance deteriorated over the second half of the financial year 2024, and it continued into the current fiscal.



Trading was suspended in Star shares earlier this month, after the company failed to lodge its annual report for fiscal year 2024. The shares are expected to resume trade on Friday.

($1 = 1.4611 Australian dollars)

Source: Investing.com