Star Entertainment swings to third-quarter loss as storms, weak demand hit casinos
(Reuters) -Star Entertainment said on Wednesday it swung to an operating loss in the third quarter, as seasonal weakness, dwindling casino visitors and Queensland property closures from March storms battered the troubled Australian gambling operator.
For the quarter ended March 31, the company reported a loss in earnings before interest, taxes, depreciation, and amortization of A$21 million ($13.41 million), before significant items, compared with an EBITDA profit of A$38 million a year earlier.
Quarterly revenues, before significant items, fell 35% to A$271 million from last year.
Operating expenses fell 3% sequentially due to lower corporate costs and volume-related reductions.
Shares rose 2.4% to A$0.1075 by 0046 GMT, outperforming a 0.2% rise in the broader benchmark index.
The company warned that there is still "material uncertainty" regarding its ability to continue as a going concern, highlighting several critical initiatives needed to shore up its liquidity position.
Earlier this month, Star agreed to an A$300 million rescue package from U.S. group Bally's and the Mathieson family — Star's largest investor.
In June, shareholders will consider approving a part of Bally's investment, which will give the U.S. casino group control of 56.7% of Star.
Star said that completing this strategic investment is critical to its survival, and it's among its key near-term initiatives, alongside securing access to proceeds from the Sydney Event Centre sale and completing a transaction to exit its DBC joint venture.
($1 = 1.5657 Australian dollars)
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