OPINION: No final dividend. Sharply higher costs. A $162.5 million reduction of the value of its flagship casino. Big questions about the growing pressure on profit margins.
No final dividend. Sharply higher costs. A $162.5 million reduction of the value of its flagship casino. Big questions about the growing pressure on profit margins.
But again, all of this costs money, and Star says the elevated costs in the June quarter represent the company’s new cost base. But with so many moving pieces, investors will probably wait and see if the cost base has really settled. But Star knows the risks to its Sydney casino are rising, and it is telling that it has lopped $162.5 million, or 16 per cent, off the goodwill value of Star Sydney, to reflect both the regulatory pressures on the business and questions over the return of the Chinese tourists that have long been a key revenue stream.
Companies sometimes like to brush non-cash impairments aside, and the writedown of Star Sydney’s goodwill won’t affect investors directly.
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