Key points:
- Q3 FY25 EBITDA loss widens to AU$21m (US$13.7m) from AU$8m in Q2
- Group revenue falls 9% quarter-on-quarter to AU$271m
- AU$300m capital injection from Bally’s and major shareholder initiated
The Star Entertainment Group has posted a widening quarterly EBITDA loss of AU$21m for the third quarter of FY2025, as the operator continues to grapple with adverse trading conditions and a major shift in its capital structure. The result compares with a loss of AU$8m in the previous quarter.
In its filing with the Australian Securities Exchange, The Star reported that group revenue for the quarter ending 31 March stood at AU$271m, reflecting a 9% decline compared with the December quarter. The downturn was attributed to seasonal trends, lower gaming visitation, and the impact of property closures in Queensland caused by extreme weather in March.
Queensland operations bore the brunt of the disruption, particularly at The Star Gold Coast and Treasury Brisbane, both of which experienced temporary closures. The company also cited softer consumer spending and reduced discretionary visitation as contributing factors.
Despite these challenges, The Star managed to reduce operating expenses by 3% compared with Q2. The savings came largely from lower corporate costs, reduced marketing expenditure and volume-linked adjustments.
As part of a broader restructuring strategy, the group has confirmed it will no longer contribute equity to the Destination Brisbane Consortium (DBC), the development vehicle for the Queen’s Wharf Brisbane project. The company made a final equity payment of AU$26m during the quarter and has stated that no further capital outlay will be made towards DBC, effective from the first quarter of 2025.
To shore up liquidity and provide support during its transformation, The Star has also secured a AU$300m capital injection through a strategic arrangement with Bally’s Corporation and its major shareholder, Investment Holdings Pty. The package comprises a mix of convertible notes and subordinated debt. Investment Holdings has committed to cover AU$100m, reducing Bally’s exposure to AU$200m (US$131m). The first AU$100m tranche was received on 9 April, with further drawdowns subject to shareholder approval.
In addition, the group completed the AU$60m sale of its Sydney Event Centre, with AU$58m of proceeds currently held in escrow, pending shareholder endorsement of the broader recapitalisation plan.
Looking ahead, The Star indicated it remains focused on executing its turnaround programme and addressing the structural challenges in its portfolio. While no formal guidance was provided, management reaffirmed its commitment to stabilising operations and restoring investor confidence.
