Casino earnings an Echo of past profits

Sydney's renovated and renamed 'The Star' casino has not performed as well as Echo hoped.

Casino group Echo Entertainment says profits plunged last financial year because of the scandals surrounding the business and soft consumer demand.

Annual net profit came in at $42 million, down 81 per cent from the year before, however the result is not directly comparable to the previous period because of the company's demerger from Tabcorp.

The comparable earnings before interest and tax also fell 39 per cent to $218 million, with the company's revenue easing a fraction to $1.62 billion.

Revenue at its Star casino in Sydney fell sharply, hurt by allegations of staff harassment and drug use.

The casino has also been hit by a lower win rate against VIPs at 1.39 per cent versus 1.97 per cent last year.

Echo's chief executive Larry Mullin says this year has been tough.

"With a soft consumer environment, compounded by the enquiry into the departure of the former MD of The Star and associated negative press, some of these factors had a short term impact on our business which we see in this result," he said.

"The market is generally soft and we have not been immune to this and, particularly in Queensland where revenues have been generally flat, the underlying business at The Star is also being impacted by a soft economy in New South Wales."

Echo's shares were down 1.8 per cent to $4.105 by 12:39pm (AEST).

Source: ABC News, 15 August 2012