• Normalized Revenue: $650 million, down 25% from H1 FY24.
• EBITDA Loss: $26 million for H1 FY25.
• Statutory Net Loss: $302 million after significant items of $166 million.
• Star Sydney Revenue: $362 million, down 19.5% from H1 FY24.
• Domestic Gaming Revenue (Sydney): Down 32%.
• Non-Gaming Revenue (Sydney): $71 million, down 3% from the prior period.
• Star Gold Coast Revenue: $218 million, down 8% from H1 FY24.
• Domestic Gaming Revenue (Gold Coast): Down 13%.
• Star Brisbane EBITDA Loss: $20 million in H1 FY25.
• Available Cash: $98 million as of April 11, 2025.
• Strategic Investment: $300 million from Bally and Investment Holdings, with $100 million received in April 2025.
• Q3 FY25 Revenue: $271 million, down 9% from the prior quarter.
• Q3 FY25 EBITDA Loss: $21 million.
• Cost-Out Program: Achieved $100 million reduction in annualized cost savings.

• Warning! GuruFocus has detected 3 Warning Signs with ASX:SGR.

Release Date: April 15, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Star Entertainment Group Ltd (ASX:SGR) secured a $300 million strategic investment from Bally and Investment Holdings, providing critical liquidity.
• The company has achieved a $100 million reduction in annualized cost savings, which is part of their cost-out program.
• The Star is focusing on regaining market share and reactivating customers through various revenue initiatives.
• The transaction with Bally and Investment Holdings is structured to provide liquidity in the short and medium term, with a coupon of 9% per annum.
• The Star will receive full ownership of two new hotels on the Gold Coast, enhancing their integrated offering in the region.

Negative Points

• The Star reported a normalized revenue of $650 million, down 25% from the previous year, and an EBITDA loss of $26 million for the period.
• The company experienced a statutory net loss of $302 million after significant items.
• The Star Sydney's revenue declined by 19.5%, with domestic gaming revenue down 32% due to regulatory changes and loss of market share.
• The Star Gold Coast's revenue was down 8%, impacted by increased controls, industry reform, and macroeconomic conditions.
• The company's cash position was negatively impacted by cash outflows from operations, CapEx, and finance costs, with available cash at $98 million as of April 11, 2025.

Q & A Highlights

Q: Is there a potential for current investors to buy shares at the same rate of $0.08 as the recent share issue? Also, is there a plan to get back to a margin LVR rating on the ASX? A: We are not currently contemplating a broader share issue at this point in time prior to the vote. Our focus is to get shareholder approval for the transaction to continue and for the liquidity injection we require. Regarding the margin LVR, we don't have an answer at the moment but will follow up on that. - Frank Krile, CFO

Q: What revenue initiatives are you working on, and is there any government appetite to level the playing field? A: We are focusing on improving customer management and interaction, enhancing non-gaming facilities, and leasing out food and beverage spaces. Regarding the level playing field, there is strong regulatory appetite to achieve a safer gaming environment, and we believe a level playing field will emerge over time. - Steve McCann, CEO

Q: Has carded play started in Queensland casinos, and is the sale of Sydney hotel rooms still a possibility? A: Carded play has not yet started in Queensland, and the timing is unclear. We prefer to stabilize operations in Sydney first. Regarding the sale of Sydney hotel rooms, non-core asset sales are paused under the current arrangements with Bally. - Steve McCann, CEO

Q: Can you clarify the impact of the Bally's strategic investment on the company's liquidity? A: The $300 million investment from Bally's and Investment Holdings provides critical liquidity. Tranche 1 of $100 million has been received, and Tranche 2 of $200 million is subject to shareholder approval and regulatory approvals. - Steve McCann, CEO

Q: What are the key challenges impacting the Star's financial performance? A: The key challenges include regulatory reforms, mandatory carded play, cash limits, and loss of market share, particularly in Sydney and Gold Coast properties. These factors have led to a decline in revenue and increased operating expenses. - Frank Krile, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.