© Reuters.
By Savyata Mishra
(Reuters) – Australia’s Star Entertainment Group said on Monday it expects to incur a non-cash impairment charge of up to A$1.6 billion ($1.11 billion) in the first half of its fiscal year if a proposed rate increase Casino tax in New South Wales is implemented in its current form.
Star Entertainment said it would incur remediation costs of around A$20 million over the six months ending December 31, 2022, as it seeks to “improve compliance processes as the group seeks to return to license suitability.” “.
The company has been embroiled in a series of government investigations into possible violations of anti-money laundering and anti-terrorism laws at its casinos over the past two years, posting an annual net loss in August. Its share price has more than halved.
Star Entertainment shares fell nearly 11% to A$1.67 in early trading.
The casino operator also announced a series of initiatives on Monday, including loyalty benefits and pricing actions, to respond to competition in Sydney, where its biggest rival, Crown Resorts, operates. The initiatives are likely to contribute around A$40 million annually to operating performance, Star Entertainment said.
It expects underlying earnings before interest, taxes, depreciation and amortization within A$195 million to A$205 million in its first half results.
In addition, a potential change to NSW gambling tax announced in December and likely to come into effect in July 2023 threatens to significantly hurt the profitability of Star Entertainment’s Sydney operations, which accounted for half of its revenue in the year. fiscal 2022.
The company said it intends to undertake an urgent review of the operating model and assets of its Sydney business if the state government’s proposal goes ahead.
The casino operator forecast underlying earnings before interest, tax, depreciation and amortization (EBITDA) of A$330 million to A$360 million for the year ending June 30, 2023, compared to A$237 million reported. last year.
($1 = 1.4457 Australian dollars)
