South Korean gaming operator Grand Korea Leisure Co Ltd (GKL) reported on Tuesday net income of nearly KRW27.2 billion (US$24.2 million) for the second quarter of 2018, up 76.2 percent from the prior-year period. The firm did not provide any reason for the sharp increase in its quarterly results.
Revenue for the three months to June 30 rose by 5.9 percent year-on-year, to just over KRW116.1 billion, the firm said in a filing to the Korea Exchange.
Operating income for the reporting period stood at approximately KRW34.7 billion, nearly doubled compared to KRW17.6 billion a year earlier, stated the company.
GKL is a subsidiary of the Korea Tourism Organization, which is an affiliated body of South Korea’s Ministry of Culture, Sports and Tourism. The company operates three foreigner-only casinos in South Korea under the Seven Luck brand, two in the capital Seoul and one in the southern port city of Busan.
The revenue improvement seen in the second quarter of 2018 reflects an easier comparison from the year-ago period. At the time, according to investment analysts, the South Korean market for inbound tourism was facing headwinds due to a political row between that country and China over the siting on South Korean soil of a U.S.-supplied missile system – known as Terminal High Altitude Area Defense (THAAD) – designed to counter North Korea’s ballistic missile programme.
The aggregate number of visitors to South Korea increased by 6.9 percent year-on-year in the first six months of 2018, to nearly 7.22 million, according to data from the Korea Tourism Organization. The number of Chinese visitors however fell 3.7 percent year-on-year in the first six months of this year, according to the official data. Still, Chinese tourists accounted for 30.1 percent of all visitor arrivals to South Korea in the six months to June 30.
In the first half of 2018, GKL recorded revenue of nearly KRW238.1 billion, up 1.3 percent year-on-year. Net income for the period grew by 35.1 year-on-year, to KRW44.5 billion, the company said in Tuesday’s filing.
GKL announced an interim dividend of KRW130 per share, amounting to a payout of about KRW8.0 billion.
Also on Tuesday, GKL reported its casino sales for July. The company said last month’s casino revenue stood at nearly KRW36.9 billion, down 25.4 percent from a year earlier.
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"The Hong Kong protests may hurt Macau gross gaming revenue by about mid-single-digit (i.e., half of maximum visitation exposure), which should fade away gradually as people will find alternative ways to visit Macau”
DS Kim, Jeremy An and Christine Wang
Analysts at brokerage JP Morgan Securities (Asia Pacific) Ltd