Star Entertainment results hit by low win in international VIP business

Star Entertainment said its interim revenue and profit in the six months to end December declined due to a low win rate in its international VIP rebate business.

The group reported net profit after tax of A$60 million ($42.6 million), down 37.9 percent on the prior comparable period. Normalized NPAT before items was up 26.1 percent to $142 million.

Actual gross revenue was down 2.6 percent to $1.1 billion, while normalized revenue rose 6.7 percent to $1.24 billion.

Star reported strong growth in its domestic operations, in particular at Star Sydney, helped by a combination of improved marketing, loyalty program and sales activity, improved product offering and stronger macro economic conditions.

Domestic table revenue increased 12.3 percent, while slot revenue was up 7.4 percent.

As a result, the group will pay an interim dividend of 5.5 cents per share for the first half of the financial year, up 10.0 percent on the prior period.

“1H FY2016 was another good performance period for the group with continued improvement in the underlying earnings and progress made on all strategic priorities,” said Chairman John O’Neill.

“The Star Sydney has led that sustained momentum as it delivers robust returns on the original $870 million transformation investment at the property. Those investments continue now at a substantial level on a group wide basis.”

Trading levels in early 2H FY2016 have remained unchanged from previous months. Gross revenue, excluding International VIP Rebate business is showing consistent volume levels to those experienced in 1H FY2016. The International VIP Rebate business performance year to date is tracking in line with management’s expectations, with growth comparison to the prior year difficult given the timing of Chinese New Year, the group said.