Star Entertainment’s Year-End Financial Report Reveals Troubling Trends and Rescue Plans
On April 15, Australia’s Star Entertainment unveiled its financial results for the six months ended December 31, showcasing a challenging landscape marked by significant losses and declining revenue. Despite the recent potential acquisition by Bally’s Corp., Star reported a staggering net loss of AU$302 million (approximately £144.6 million, €169.2 million, or US$191.6 million).
The long-awaited financial report, filed with the Australian Securities Exchange (ASX), arrived more than a month past the February 28 deadline, highlighting a critical need for financial transparency—one hampered by the company’s dire fiscal circumstances. Following the collapse of a substantial debt refinancing deal with Salter Brothers, Star officially accepted a AU$300 million takeover bid from Bally’s on April 7. This bid is set to inject crucial capital into the company, with Bally’s pledging AU$200 million, while Investment Holdings, helmed by Star’s largest shareholder Bruce Mathieson, will contribute the remaining funds.
Star received an initial AU$100 million from this takeover on April 9, temporarily providing a buffer against its financial troubles. However, the overall revenue for the first half of 2025 was a significant AU$649.6 million, representing a sharp decline of 25% from the previous year. Gaming revenue, a core driver of the business, plummeted by 32% to AU$464 million, contrasting with a modest growth of 1.8% in non-gaming revenue, which reached AU$185.6 million. The company’s EBITDA also took a hit, dropping from AU$113.6 million in the prior year to a loss of AU$26.4 million.
Star attributed its increased net losses, which amounted to AU$302 million, to "significant items" totaling AU$166.2 million, encompassing various fines, debt refinancing costs, and other financial complexities.
A Close Look at Liquidity
Investors and industry analysts are particularly focused on Star’s liquidity position, which stood at only AU$98 million as of April 11—two days subsequent to the cash influx from the takeover. This precarious situation suggests that the company was nearly out of cash before securing the much-needed financial lifeline.
Star’s liquidity concerns had been underscored in a January 8 announcement, where it disclosed that it had burned through AU$107 million in the preceding quarter alone. With the initial takeover funds and a AU$60 million divestiture of the Star Sydney Event Centre, Star might navigate its financial predicaments until Bally’s begins its operational takeover. A shareholder meeting to discuss and approve these developments is anticipated late in June.
Yet, despite these arrangements, Star’s report raised red flags by reiterating a familiar caution regarding the group’s capacity to continue as a going concern—a statement that has appeared in multiple press releases recently. Speculation persists that further capital injections may be necessary for a successful recovery.
Insight into Property Performance
At the individual property level, the flagship Star Sydney reported lower net revenue of AU$362.2 million, a decline of 19.5% compared to the previous year. The property recorded an EBITDA loss, shifting from a positive AU$37.4 million to a loss of AU$24.6 million. Star attributed these figures to intensified operational protocols, including the implementation of mandatory carded play and cash restrictions, alongside a shrinking market share and broader economic conditions.
Mandatory carded play and cash restrictions took effect on October 19, 2024, while Star Sydney’s casino license remains suspended following failures in two separate suitability assessments.
Star Gold Coast, also under regulatory scrutiny, reported net revenue of AU$218.2 million, equating to an 8.4% drop year-on-year. Although the EBITDA stood positive at AU$18.1 million, this marks a steep decline of 59% compared to the previous period.
Future Prospects and Development Plans
In relation to Star Brisbane, the company’s exit from the joint venture—selling its 50% stake to partners Chow Tai Fook and Far East Consortium for AU$53 million—appears to be proceeding as intended, despite Bally’s opposition to the transaction. Star has confirmed ongoing progress towards this exit, with documentation expected to finalize by the end of April and the closing of the deal targeted for late June.
This strategic move is primarily aimed at fostering cost reductions. By divesting from the venture, Star relinquishes its financial obligations linked to its share of the project’s AU$1.4 billion debt and eliminates at least AU$212 million in future equity expenditures. Furthermore, the operational fee for the casino has doubled to AU$5 million monthly through June 2026.
As part of the exit agreement, Star has reclaimed full ownership of both hotel towers at Gold Coast, a site that includes additional development space for future growth.
In summary, while these developments offer some hope for Star Entertainment’s immediate future, the road to recovery seems fraught with challenges. The upcoming months will be pivotal in assessing whether the company can stabilize its financial standing and regain market confidence.