Australia’s Star Entertainment flags need for liquidity, posts lower profit By Reuters
(Reuters) – Australia’s Star Entertainment flagged near-term cash needs on Thursday and said it would look to raise capital, after the casino company reported a 71% drop in annual profit due to challenging trading conditions.
The embattled firm had A$130 million ($88.97 million) as of the end of August, but will need more cash for group operations at current trading levels, restructuring operations and cash flow related to regulatory issues.
“Star continues to explore other ways to continue to support its financial position, including other potential sources of capital such as subordinated debt,” the company said in a statement.
On Wednesday, Star secured two loans of up to A$200 million, with an immediate injection of A$100 million to deal with cost reductions the gaming group is facing at its new Queens Wharf resort in Brisbane.
Its underlying after-tax profit fell to A$12 million in the year ended June 30 from A$41 million a year earlier.
The company did not declare a final dividend, which is consistent with the corresponding previous period.
Star said its trading performance fell sharply in the second half of the 2024 financial year, and has continued to hit current earnings.
The cash-strapped casino company has been plagued by tighter controls, guest management, and regulatory compliance costs over the past two years following alleged violations of anti-money laundering and terrorist financing laws.
Trading was suspended in Star shares earlier this month, after the company failed to file its annual report for the 2024 financial year. Shares are expected to resume trading this week.
($1 = 1.4611 Australian dollars)
