The Star Entertainment Group Ltd (ASX: SGR) share price is sliding today.
Shares in the S&P/ASX 200 Index (ASX: XJO) casino operator closed yesterday trading for 55 cents. In morning trade on Friday, shares are swapping hands for 53 cents apiece, down 2.4%.
For some context, the ASX 200 is down 0.5% at this same time.
This comes following the release of Star's third quarter trading update for the three months ending 31 March (Q3 FY24).
Read on for the highlights.
What happened during the quarter?
The Star Entertainment share price is dropping after the company reported a 4.6% year on year decline in net revenue. Net revenue for the quarter came in at $419.2 million, down from $439.5 in Q3 FY 2023.
Management said that revenue from Star's Premium Gaming Rooms (PGRs) slid across all of its properties during the quarter. The Star Sydney PGR revenue was down 19.3%; the Star Gold Coast PGR revenue was down 20.0%; and Treasury Brisbane PGR revenue was down 28% from Q3 FY 2023.
The revenue slide was softened by strong performance across the company's Main Gaming Floor (MGF) segment, which increased at all Star's properties. MGF revenue increased 5.4% at the Star Sydney; revenue was up 4.6% at the Star Gold Coast; and revenue increased by 6.4% at Treasury Brisbane compared to Q3 FY 2023.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) of 37.9 million were down 11.5% from $42.9 million reported in the prior corresponding period.
And while losses improved year on year, the Star Entertainment share price is still under pressure with the company reporting a net loss after tax of $6.8 million for the three months. That compares to a net loss after tax of $49.7 million in Q3 FY 2023.
On the cost front, operating expenses dropped 4.2% year on year.
However, Star has been increasing investment in its risk, controls and transformation teams to strengthen the control environment. This sees operating expenses up $1.8 million on the monthly run-rate from the first half of FY 2024.
Operating expenses in the first half of FY 2024 average $90.3 million per month. In Q3 FY 2024 this increased to a monthly average of $92.1 million.
Management said they "will continue to exercise cost control with a focus on making the appropriate investment in improving the control environment".
Looking ahead, Star said that negotiations for the sale of assets including the Treasury Casino, Hotel and car park "are progressing well".
The company also reported that the phased opening of Queen's Wharf Brisbane in August 2024 remains on track.
Star Entertainment share price snapshot
The Star Entertainment share price is down 55% over 12 months. The past month showed some signs of recovery, with shares up 1% over the month.
