By By Shivangi Lahiri
(Reuters) – Australia’s Star Entertainment saw its shares plummet as much as 25.6% during trade on Thursday to hit a record low, facing repercussions following its Wednesday announcement on the casino operator’s concerning cash and liquidity position for the December quarter.
The embattled Australian casino operator updated markets on Wednesday after trading hours, saying that the group had available cash of A$79 million ($49.05 million) at the end of December, a reduction of A$70 million from the previously reported September quarter balance of A$149 million.
Star added in its statement on Wednesday that the group had burnt through A$107 million in available cash over the December quarter as well, reflecting continued difficult trading conditions, essential capital expenditure and the first A$5 million instalment of the A$15 million fine imposed by the NSW Independent (LON:IOG) Casino (EPA:CASP) Commission on Oct. 17, among other significant cash-crunching events.
“We see no catalyst for an improvement in earnings in the short term,” analysts at Jefferies said, expecting revenue for Star to be impacted soon by the introduction of cash limits and the start of cashless gaming in its Queensland locations.
“From a cost perspective, cost-out is near impossible given continued requirement for investment in remediation.”
Star Entertainment currently expects to release its half-year results on Feb. 28.
($1 = 1.6106 Australian dollars)