Star’s losses won’t derail construction projects
A near A$100 million loss by Star Entertainment in the past financial year won’t take away from major projects the group is undertaking in Queensland and New South Wales.
News.com.au reports the that construction plans at Star Entertainment sites in Queensland and New South Wales won’t be impacted by the loss, which has been brought about due to COVID-19 enforced casino closures from March.
The initial onset of the virus caused the casino giant to stand down 8500 staff members while it was unable to operate.
Star noted its earnings and revenue would have tracked positive if the pandemic had not occurred.
Star chairman John O’Neill said the group’s major Queen’s Wharf project in Brisbane and the overhaul of its Gold Coast Casino were on track.
“Major projects at Queen’s Wharf Brisbane and The Star Gold Coast are proceeding to plan, with the upgraded and expanded Sovereign at The Star Sydney delivered on time and budget,” he said.
The group’s chief executive Matt Bekier said the premier Brisbane project had secured a further A$1.6 billion in debt funding.
“Execution of our longstanding growth strategy continued to plan over financial year 2020,” he said.
“Initial response by our highest value domestic customers to the new Sovereign in Sydney since its July 2020 opening has been pleasing.”
Revenue sales from Star Sydney were down 26.1 per cent on the previous period to A$1.02 billion, while Queensland net revenue was down 18.5 per cent to A$641 million.
Star said despite social distancing implemented at its venues, revenue in July improved and was 80 per cent of what was accrued in the same month last year.
Between April and June, Star collected A$64.8 million in JobKeeper payments from the Federal Government.
It estimates by September 27, the figure will be A$130 million with 7000 employees still to receive the wage subsidy.
The Star said it would not pay a final dividend to shareholders due to the uncertain economic outlook fuelled by the virus.
Star stands down 90 per cent of its staff
The Star Entertainment Group has been forced to stand down 90 per cent of its 9,000 strong workforce at its casinos on the Gold Coast, Brisbane and Sydney.
My GC reported in March that coronavirus is to blame for the stand down, with casinos, bars and restaurants shut.
The company’s hotels remained open, but in a reduced capacity.
In a statement to the ASX, Star said the shutdown of casinos will have a “material impact on The Star’s operations.”
“Management is focused on implementing strategies to minimise impacts and conserve liquidity.
“These include materially lowering operating costs and reducing capital expenditure.
“The Star has taken a very difficult, but necessary decision in relation to its workforce.
“We are in the process of temporarily standing down more than 90 per cent of our approximately 9,000 employees. These stand downs include senior management.”
Employees who are stood down will be given two weeks of paid pandemic leave.
Staff will also be able to access any annual or long service leave they have accrued.
The Board and senior management will have their directors’ fees and salaries slashed with details of those arrangements to be finalised in coming days.
“The Star will continue to monitor developments in the coronavirus situation and the impacts on The Star’s business.
“At this time, we are unable to reliably advise of the impacts on financial performance due to the uncertain duration of the current circumstances.”