Star Entertainment Group Ltd (ASX: SGR) has reported a modest loss amid "challenging" trading conditions, as the company's turnaround plan continues to evolve.
The company said in a statement to the ASX on Monday that revenue for the first half was $585 million, down from $650 million for the previous corresponding period, while the company posted an EBITDA loss of $8 million compared with a $26 million loss previously.
The net loss including one-off items came in at $110 million compared with $302 million.
Image source: Getty Images
Difficult times continue
Star said that revenue was lower primarily due to an 18% fall in gaming revenue, "which was impacted by continued challenging trading conditions (casino industry reforms) and loss of market share''.
The company's funding costs increased by $18 million, reflecting higher debt balances and interest on bank loans.
Star said that since Managing Director Bruce Mathieson Jr had taken on his role in mid-December, "The Star, in consultation with its major shareholders and by leveraging their expertise, has been reviewing the resourcing structure and strategy of The Star's operations, and has commenced a process of restructuring the Group's operations and marketing strategy''.
Mr Mathieson Jr said regarding the result:
Our corporate office is being streamlined, and essential support functions will be managed at the property level in Sydney, Gold Coast and Brisbane. To support long-term success, these changes will strengthen our financial position. We continue to pursue appropriate cost out initiatives and are exploring and implementing initiatives to attract customers to our properties. We are committed to pursuing a transparent, practical and sustainable pathway that ensures our remediation plan is delivered to the standard expected, while supporting consistency, embedment and demonstrable maturity across the group. We have immense potential in our properties, and we are committed to transforming The Star into premier entertainment destinations.
Breaking the result down by state, Sydney generated $323.8 million in revenue, down 10.6%, while Gold Coast generated $212.3 million, down 2.7%.
The Star is now majority-owned by Bally's Corporation after a takeover bid was accepted by shareholders last year, without which there was a high risk the company would have failed.
Independent expert Grant Samuels said at the time that the takeover terms were "not fair", but ultimately the "only lifeline" left for Star Entertainment.
Star Entertainment Group shares were trading 4% lower at 12 cents on Monday morning.
The company was valued at $830 million at the close of trade on Friday.
