In the full-year 2019-20, the finance sector experienced a decline of 10.9% compared to previous results. The majority of the gross revenue, amounting to $1.36bn, came from domestic gaming. This represented a 9.6% increase compared to the previous year. On the other hand, international VIP revenue dropped significantly by 96.7% to $9.5m due to travel restrictions. Non-gaming and other revenue also fell by 16.4% to $183.8m. After deducting player rebates and commissions costing $11.7m, the net revenue reached $1.54bn, indicating a 3.9% increase year-on-year from $1.48bn.
The Sydney location of Star contributed $828.2m to the total revenue, a 29.1% decrease compared to the previous year. The majority of this revenue, $458.1m, came from domestic table games, while slots generated $277.7m and non-gaming activities yielded $77.1m. In a recent incident, an employee at Star Sydney was imprisoned after orchestrating an illegal betting scam that resulted in a loss of $467,000 for the casino.
Meanwhile, the Gold Coast location of Star experienced a rise in revenue by 16.3%, reaching a total of $381.3m. Slots were the primary revenue generator, bringing in $203.9m, followed by domestic table revenue at $100.8m and $74.5m from non-gaming activities. The Brisbane location also performed well, with a revenue increase of 38.1% amounting to $347.6m. Slots contributed $173.8m, while domestic table revenue and non-gaming activities totaled $149.5m and $22.8m, respectively.
The COVID-19 pandemic had a significant impact on the total gross revenues of each region, as the casinos had to intermittently shut down. Player rebates and commission expenses decreased by 95.5% year-on-year to $11.7m, while gaming taxes and levies increased by 0.3% to $378.7m. Operating expenditure decreased by 10.5% to $740.0m. Taking these expenses into account, the earnings before interest, tax depreciation, and amortization (EBITDA) amounted to $426.7m, representing a substantial increase of 51.3% compared to the previous year.
The inclusion of depreciation and amortization costs totaling $210.5m, along with other costs of $4.4m, resulted in earnings before interest and tax (EBIT) of $211.8m. This marked a significant increase of 172.6% compared to the full year 2020. Additional costs, which involved net funding, tax, and significant items, amounted to $153.9m. Consequently, the net profit reached $57.9m, showing substantial growth of $152.7m year-on-year compared to the previous year’s loss of $94.8m.
In addition to these results, Star also reported normalized figures, which consider volatility using an average win rate of 1.25% of turnover. The normalized gross revenue witnessed a decline of 20.8% year-on-year, reaching $1.56bn. The Sydney location contributed $832.0m to this figure, while the Gold Coast and Brisbane locations generated $382.0m and $348.0m, respectively. Normalized EBITDA amounted to $430.0m, with EBIT at $219.0m.
Star chairman John O’Neill stated, “The Group continued executing its strategy well in the context of the extraordinary COVID-19 related challenges. The fundamental earnings prospects for The Star’s domestic business remain attractive. They are underpinned by valuable long-term licenses in compelling locations, and the transformation of our properties into globally competitive entertainment destinations is nearing completion.”
