A run of high in-house wins by visiting high roller Asian gamblers resulted in half year profits plunging for the Australian gambling group, Star Entertainment Corp.
Analysts had estimated half-year profits to be $89 million, but the actual number dropped 77% to just $32.9 million.
VIP players from Asia won at a much higher rate than usual, which resulted in a plunge in Star Entertainment's profits.
However, the chief executive officer of Star, Matt Bekkier, remained unfazed by the latest numbers. He said that these events should be expected in the running of a business.
In recent years, Star Entertainment had logged a number of half year profit periods where house wins were higher than usual, and thus lower periods were also to be expected.
Bekkier went on to explain that Star had calculated "normalized profits" (ie when companies re-calculate results with a consistent win rate to reflect their performance), and the results were a rise of 12% to R120.4 million.
Asian VIP Players Return to Oz
By looking at the numbers, it seems that Asian VIP players have returned to the Australian gambling market. Crown staff were arrested in China in 2016 and many were jailed, and this resulted in a mass retreat of VIP players to Australia.
Both Crown and Star, however, report that these VIP players are returning in droves. Star's VIP turnover increased by half to regular levels.
A recovery of Macau's market also reflected positively on the Oz market. Bekkier explained that Macau's success story helped send VIPs to Australia as "no player that comes to Australia has not played in Macau before."
Star Share Prices Dip
Despite the fact that Star's leadership seems to be calm about the drop in half year profit numbers, the market appeared jittery and investors reacted in kind. Shares in the company dropped as much as 7% which was their biggest reported decline in nearly three years.
Star Entertainment is viewing this as a mere hiccup in the process and is moving ahead with a number of projects. The company is building a resort in the middle of Brisbane and will pay an interim dividend of 7.5 cents per share.