(Reuters) - Australia's Star Entertainment Group swung to an annual profit on Tuesday as operating conditions continued to stabilise and revenues improved across segments, also helping the cash-strapped casino operator significantly reduce its debt levels.
Star posted marginal improvements in revenue across all segments, which helped offset headwinds from regulatory restrictions on its Sydney operations and stiff competition from bigger rival Crown Resort that started operating in the same city last August.
The positive update brought investors some relief, sending its shares up 4.2% at A$0.99 at 0011 GMT, compared to a 0.3% jump in the benchmark index.
The Brisbane-headquartered company posted a gross revenue of A$1.87 billion ($1.20 billion) for the full-year ended June 30, a 22% surge from 2022.
The company has been aggressively working its way through refinancing its existing debt through cost-reduction measures and other operational initiatives.
Star had a net debt of A$596 million, as of June 30, a strong reduction from its debt levels of A$1.11 billion at end-2022.
The casino operator posted a net profit after tax attributable, before significant items, of A$41 million for fiscal 2023, versus a loss of A$31 million a year earlier.
Star, however, had to bear the brunt of an impairment charge of A$2.48 billion, excluding taxes, as it had to write down significant items from volatile operating conditions at its Sydney operations and regulatory and legal costs.
It projected fiscal 2024 capital expenditures to be within the range of A$100 million to A$120 million, stating that it plans to provide an update on the debt refinancing process in the months ahead.
Star managed to find a resolution over the New South Wales casino duty rate increases, with the impact of new arrangements expected to be A$10 million in fiscal 2024.
($1 = 1.5555 Australian dollars)