- The Star Entertainment Group (SGR) will cut 500 jobs as part of a strategic review to reduce costs in the face of deteriorating operating conditions
- The company’s current earnings performance is tracking at unprecedented low levels due to regulator-imposed restrictions and low consumer spending behaviour
- This is despite a “strong” performance for the first half of the financial year, according to SGR, driven by strong domestic revenues that have since diminished
- Underlying FY23 EBITDA is expected to be in the order of $280 million to $310 million, down from the company’s previous forecast of $330 million to $360 million
- SGR shares closed 7.35 per cent lower at $1.26 on Wednesday afternoon
The Star Entertainment Group (SGR) will cut 500 jobs as part of a strategic review to reduce costs in the face of deteriorating operating conditions.
The company said in a statement to the ASX that its current earning performance, from its Sydney and Gold Coast casinos in particular, was at an unprecedented low level due to regulator-imposed restrictions and low consumer spending behaviour.
Following the Bell Review, The Star’s Sydney casino licence was suspended and the company was hit with a $100 million fine.
The licences for its Queensland casinos were also suspended following the Gotterson Review, with an additional $100 million fine.
SGR said a “strong” performance for the first half of the 2023 financial year, driven by strong domestic revenues, had deteriorated over recent weeks.
“If these current conditions continue for the balance of the financial year and do not materially change, underlying FY23 EBITDA is expected to be in the order of $280 million to $310 million,” the statement to the ASX read.
This would be a significant downgrade to the company’s previous expectations of between $330 million to $360 million.
In addition to laying off 500 full-time employees, SGR also plans to cancel its short-term and other incentives for the 2023 financial year and introduce a salary freeze for its non-EBA employees.
These initiatives, in addition to $40 million worth of operational actions already announced, are anticipated to reduce group operating expenditure for the year by more than $100 million.
SGR shares closed 7.35 per cent lower at $1.26 on Wednesday afternoon.