Revenue down but domestic market keeps Star Entertainment Group profitable in FY21

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The Star Gold Coast

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Australias Star Entertainment Group has reported net profit after tax of AU$58 million in the 12 months to 30 June 2021, with domestic market performance helping counteract massive declines in the companys international VIP business.

With COVID-19 continuing to hamper the companys three properties The Star Sydney, The Star Gold Coast and Treasury Brisbane gross revenue fell 11% year-on-year to AU$1.56 billion, although EBITDA grew 51% to AU$427 million.

Sydney was the hardest by COVID-19, with short-term lockdowns and capacity restrictions resulting in a 30% year-on-year decline in normalized revenue to AU$832 million and 26% decline in EBITDA to AU$204 million. Domestic revenue fell 10% to AU$813 million while VIP revenue was down 96% to just AU$12 million.

On the Gold Coast, VIP revenue plummeted to just AU$1 million, forcing a 28% year-on-year decline in gross revenue to AU$382 million. However, The Star Gold Coast achieved record domestic earnings with revenue up 26% to AU$379 million and EBITDA up 17% to AU$112 million. Star said that domestic gaming revenue during the second half of the year was also up 18% versus the same period in 2019 including a 22% increase in slots and 13% in table games.

Brisbane recorded a 34% increase in revenue to AU$348 million, none of which came from the VIP segment.

Notably, the Star said it plans to focus on international premium mass and direct premium customers once borders re-open, presumably sometime in 2022.

The Group continued executing its strategy well in the context of the extraordinary COVID-19 related challenges, said Chairman John ONeill.

The fundamental earnings prospects for The Stars 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.