(Reuters) -Australian embattled casino group Star Entertainment on Friday narrowed its first-quarter loss sequentially on better performance across its operations but investor concerns around the firm’s operational viability continued to linger.
The company reported a loss before interest, taxes, depreciation and amortization for the three months ended September 30 of A$13 million ($8.45 million), compared with a loss of A$27 million for the previous quarter.
Shares of the casino operator rose 3.4% to A$0.091 as of 0030 GMT.
Stabilised trading in Sydney during the quarter, as well as seasonally stronger volumes on the Gold Coast and a higher operator fee for The Star Brisbane, powered the casino operator’s results.
Star, however, cautioned that trading levels at its Star Sydney casino remain at historically low levels.
Operating conditions remain challenging due to the impact of mandatory carded play and cash limits in New South Wales and stricter regulatory requirements across all properties, the cash-strapped firm said.
Adding to worries, the company flagged that the magnitude and timing of the pending judgment from the Australian Transaction Reports and Analysis Centre, or AUSTRAC, will impact the execution of its ongoing capital management strategy in the timeframe required.
In 2022, the Australian financial crimes regulator had begun a civil lawsuit against Star’s units, alleging non-compliance with anti-money laundering and counter-terrorism financing laws.
According to recent media reports, the regulator could seek a penalty of around A$400 million.
Building up over the last few years, Star has faced back-to-back probes into its management and operations, which include accusations of money laundering and fraud, among others.
In the last few months, the financial crisis at the firm has deepened, bringing Star to the brink of bankruptcy and potential liquidation, only to be saved by loan packages and covenant waivers — or temporary relief from certain contract terms.
As at September 30, liquid cash had dwindled to A$168 million, compared with A$234 million three months ago.
($1 = 1.5389 Australian dollars)
(Reporting by Sneha Kumar in Bengaluru; Editing by Alan Barona)
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