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Star Entertainment Group falls to AU$95 million loss in FY20 but domestic gaming showing signs of recovery

Australia’s Star Entertainment Group slipped to a loss of AU$95 million (US$68.2 million) in the 12 months to 30 June 2020, heavily impacted by the closure of its Sydney and Queensland casinos during the height of the COVID-19 pandemic.

The company reported a 31.1% fall in revenue for the year to AU$1.49 billion (US$1.07 billion), with EBITDA down 49.0% to AU$282 million (US$202.3 million). In the pre-COVID period from July 2019 to February 2020, revenue was down 10.1% to AU$1.35 billion (US$966 million) and EBITDA by 35.0% to AU$264 million (US$189.7 million), with Star running at a profit of AU$67 million (US$48.1 million).

Star said its flagship property, The Star Sydney, had been running relatively flat versus FY19 during the pre-COVID period in both the domestic and VIP gaming segments before visitation slowed, while its Queensland properties on the Gold Coast and Brisbane had seen an 80.3% increase in VIP revenue, which still finished the year up 62.0% on FY19 at AU$235 million (US$168.6 million).

Providing an update on trading since the end of the financial year, Star said VIP turnover in July had fallen to just 5% of July 2019 numbers although domestic gaming revenues had returned to 80% since properties re-opened between 1 and 3 July. It added that similar domestic trends had continued in Queensland through 17 August, although The Star Sydney had been impacted by a recent return to stricter social distancing requirements.

“The Star’s business is fundamentally strong, evidenced by the step up in earnings growth from 1H FY2020 into early 2H FY2020,” said Managing Director and Chief Executive Officer, Matt Bekier.

“The long-term value uplift from investments in our network of integrated resorts and continuing operational improvements to drive visitation and earnings remain substantial.”

Star did not declare a final dividend for FY20.

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