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Star Entertainment (ASX: SGR) has seen its profits slump by 76.8 per cent as it prepares to launch key projects in Queensland and New South Wales.
The group's first-half profit dropped by 76.8 per cent to $32.9 million, weighed down by $32 million in significant items and an abnormally low win rate in the international VIP rebate business.
Revenue for the six months to December 31 rose 3.3 per cent to $1.27 billion, and the company maintained a fully-franked interim dividend of 7.5 cents a share.
Despite the fall in profit, Star reported record half-year revenues, with strong, broad-based underlying growth across Sydney and Queensland.
The company has announced the opening of The Darling Gold Coast and the MGF expansion will complete opening by the end of March 2018.
Work on Queen's Warf in Brisbane are "progressing well" now that development approval has been received.
The company has also received development approval for Sydney domestic PGR, with preparatory works commencing in the second half.
Chairman John O'Neill says the new works in Sydney and the Gold Coast have already proved their worth.
"We have witnessed the beneficial impact of major capital works already completed at the Gold Coast and Sydney," says O'Neill.
Overall in Queensland statutory and normalised gross revenue increased in the first half, with both surpassing the $400 million mark for the first time ever.
Managing director and CEO Matt Bekier says the Queensland results reflect the massive investment of resources made by Star.
"The Gold Coast results validate the investment strategy we are pursuing in South-East Queensland," says Bekier.
"The assets commissioned last year continue to gain traction and there are more development projects either set for completion or in the pipeline for The Star Gold Coast. The Darling Hotelis largely open, with the remainder opening ahead of the Gold Coast 2018 Commonwealth Games."
Despite a downturn in the group's International VIP Rebate business, Star says it has just returned to business as usual.
"The International VIP Rebate business has returned to previous levels of activity, enhanced by the diversification strategy we devised and started executing against well before the North Asian market disruption 16 months ago," says Bekier.
Shares in Star are down 4.46 per cent to $5.78 per share at 10.43am AEDT.
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