The Star Entertainment Group (SGR) H2 2024 earnings summary

Executive summary

• Statutory EBITDA for FY24 was AUD 175 million, down 45% year-over-year, with a statutory net loss of AUD 1.69 billion, mainly due to a AUD 1.44 billion non-cash impairment and challenging trading conditions.

• Revenue declined 10% to AUD 1,678 million, reflecting loss of market share, regulatory changes, and a softer consumer environment.

• Business performance deteriorated further in the second half of FY24, with EBITDA losses in July and August 2024.

• The Star Brisbane opened in August 2024, replacing Treasury Brisbane, with initial gaming revenues up relative to Treasury and further ramp-up expected.

• Ongoing regulatory and legal issues, including the Bell Two Report and AUSTRAC proceedings, have created material uncertainty regarding the Group's ability to continue as a going concern.

Financial highlights

• Impairments totaled AUD 1.44 billion across Sydney, Gold Coast, and Brisbane segments.

• FY24 revenue was AUD 1,678 million (down from AUD 1,868 million in FY23); EBITDA margin fell to 10.4% from 17%.

• Operating expenses increased to AUD 301 million in FY24, up 40% from FY22, mainly due to risk, controls, and transformation.

• Available cash as of 31 August 2024 was AUD 130 million, after accounting for restricted and cage cash.

• Property-level EBITDA in FY24 was AUD 476 million before corporate and remediation costs.

Outlook and guidance

• Short-term liquidity runway secured through new debt facilities, with focus on cost reduction, asset sales, and capital raising.

• Mandatory carded play and reduced cash limits expected to further impact revenue as rollout continues.

• Over AUD 100 million in annualized cost savings targeted by March 2025, with further savings under review.

• Additional equity contributions required for Queen's Wharf completion and further funding for ramp-up and debt servicing.

• Maintenance capex targeted at AUD 80 million for FY25, down from an average of AUD 105 million (FY22–FY24).