Star cuts staff and freezes salaries
Star Entertainment will cut $100m worth of costs, sacking at least 500 workers, as it warns of a “rapid deterioration” in operating conditions across the troubled casino group.
Star – which owns casinos in Sydney, Brisbane and the Gold Coast – on Wednesday said it expected its earnings before interest, tax, depreciation and amortisation (EBITDA) to plummet to $280m, a fall of up to $80m on previous estimates.
Star also said it would cancel executive bonuses and launch a salary freeze on employees not covered by enterprise bargaining agreements.
The company had previously warned of a dire outlook for its flagship Pyrmont resort, where its casino licence has been suspended and hit with a $100m fine over money laundering breaches.
But on Wednesday it said its Gold Coast casino was also suffering, following a short-lived rebound from Covid-19.
While the loss of 500 fulltime equivalent roles is expected to be across the group, it is understood the cuts will be more heavily skewed towards its Sydney operations.
Star Entertainment currently employs 8000 people.
“The strong 1H FY23 performance at the Group’s Queensland properties as reported in February, which was driven by strong domestic revenues in that period – relative to pre-covid levels – has deteriorated in recent weeks, particularly at the Gold Coast,” the company said. “To put the operating environment into perspective, the group’s current earnings performance is at unprecedented low levels – excluding the Covid-19 period.”
The company also said on Wednesday it would pursue a sale of the Sheraton Grand Mirage Resort Gold Coast, with indicative bids from interested parties expected shortly.
The financial carnage comes two months after Star announced a writedown of $988m on its Sydney gaming complex after former NSW Treasurer Matt Kean’s proposal to lift the casino tax rate.
On Wednesday it said its cost cutting program was “independent of any potential impact from the proposed casino duty rate increases in NSW”.