By David Winning
SYDNEY–The Star Entertainment Group Ltd. announced that their integrated resort Queen’s Wharf in Brisbane is over budget and opening later than planned, overshadowing a positive update on trading at their other casinos.
According to the Star, the total cost for Queen’s Wharf is likely to be 10% higher than the earlier forecast of AU$2.60 billion (US$1.82 billion) due to higher building material costs, labor shortages and supply chain bottlenecks, among other things.
The resort is now set to open from the second half of next year, subject to the company getting all the permits. That represents a delay from a previous target of mid-2023, Star said. The delay has been attributed to above-average rainfall and the impact of the Covid-19 pandemic.
Star, which owns 50% of Queen’s Wharf, said the venture partners would fund most of the cost hike by bringing in more equity and funding the rest from future operating cash flows.
The Queen’s Wharf update has been delivered along with a snapshot of current trading and earnings expectations for the 12 months to June 2022. Star expects to release its full-year results on August 22.
Star said it expects annual normalized revenue to come in at A$1.53 billion and said the fiscal fourth quarter showed improving trends across its casinos. Management said July trading was above 2019 levels before the pandemic turned the industry on its head.
“Star Sydney has seen further improvement in table game performance and is currently trading above pre-Covid levels,” Star said of July’s performance. “Both Queensland properties are performing strongly and remain above pre-Covid levels.”
Write to David Winning at [email protected]