SHARES in Australian casino operator Star Entertainment slumped more than 50 per cent to a record low on Friday (Sep 27), as it resumed trading a day after posting a second straight multibillion dollar annual loss on a write-down in its venues’ value.
The company wiped A$1.4 billion (S$1.2 billion) from the value of its casinos in Sydney, Brisbane and the Gold Coast because of “challenging trading conditions” and regulatory changes, including a switch to mandatory cashless gambling.
Statutory net loss after tax came in at about A$1.7 billion for the year ended Jun 30, from about A$2.4 billion a year earlier.
“The earnings collapse is worse than we expected,” Morningstar said, and slashed its 2025 earnings forecast for the company by a third.
“We also lower our longer-term earnings as Star looks much less profitable given the current tighter regulatory regime.”
The stock dropped as much as 54.4 per cent to A$0.205 by 0032 GMT, becoming the worst performer on the ASX 200 benchmark index.
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Trading in Star shares was suspended on Sep 2 by the Australian bourse operator, after the company failed to lodge its annual report for fiscal 2024 by the required due date.
In its results posted four weeks after the reporting deadline on Thursday, Star said it might offload assets for ongoing restructuring activities and outflows regarding regulatory matters.
In recent years, Star and larger rival Crown Resorts have faced multiple inquiries into violations of anti-money laundering rules.
A government-ordered inquiry delivered an adverse finding regarding Star’s governance at its Sydney venue, which may bring tougher regulatory oversight and fines.
Star submitted its response to the New South Wales casino regulator’s show-cause notice after trading hours on Friday, saying it made submissions about Star Sydney’s suitability to hold a casino licence, among other things.
Neither Star nor the regulator immediately responded to Reuters requests seeking further details. REUTERS
