Australia's Star Entertainment plunges after multi-billion-dollar loss

(Reuters) -Shares in Australia's no.2 casino operator Star Entertainment slumped over 50% to a record low on Friday, as it resumed trading a day after posting a second straight multi-billion-dollar annual loss on a write-down in its venues' value.

The company wiped A$1.4 billion ($963.90 million) from the value of its casinos in Sydney, Brisbane and the Gold Coast because of "challenging trading conditions" and regulatory changes, including a switch to mandatory cashless gambling.

Statutory net loss after tax came in at A$1.69 billion for the year ended June 30, from A$2.44 billion a year earlier.

"The earnings collapse is worse than we expected," Morningstar said in a note and slashed its 2025 earnings forecast for the company by a third.

"We also lower our longer-term earnings as Star looks much less profitable given the current tighter regulatory regime."

The stock dropped as much as 54.4% to A$0.205 by 0032 GMT, becoming the worst performer on the ASX 200 benchmark index.

Trading in Star shares was suspended on Sept. 2 by the Australian bourse operator, after the company failed to lodge its annual report for fiscal 2024 by the required due date.

In its results posted four weeks after the reporting deadline on Thursday, Star said it might offload assets for ongoing restructuring activities and outflows regarding regulatory matters.

In recent years, Star and larger rival Crown Resorts have faced multiple inquiries into violations of anti-money laundering rules.

A government-ordered inquiry delivered an adverse finding regarding Star's governance at its Sydney venue, which may bring tougher regulatory oversight and fines.

Star is also due to respond to the New South Wales gambling regulator's show-cause notice by Friday, which related to a report that showed Star had been slow to address governance and cultural issues.

($1 = 1.4524 Australian dollars)

(Reporting by Himanshi Akhand in Bengaluru; Editing by Rashmi Aich)