Casino op Kangwon Land dips to huge 1Q loss
Kangwon Land Inc swung to a KRW156.1-billion (US$127.5-million) loss in the first quarter compared to a KRW102.4-billion profit in the prior-year quarter. The firm operates Kangwon Land, a resort with the only casino in South Korea that is permitted to serve domestic players.
The result was negatively affected in part by a 507-percent jump in the amount of money the firm was required to provide to support a local area where a closed coal mine is located.
Such support went from KRW38.9 billion in first-quarter 2019, to KRW236 billion in first-quarter 2020. An earnings presentation said the increase included KRW188.7 billion recognised as an “additional collection amount’ covering five years from 2014 to 2018 inclusive.
Total sales at the resort – a venue located in a remote upland area several hours by car from Seoul – stood at KRW236 billion, down 37.5 percent from the KRW377.45 billion achieved in the first quarter 2019.
Casino sales in the first three months this year fell 39.2 percent year-on-year, to KRW200 billion, from KRW329.0 billion in the prior-year quarter.
The group did not give commentary on the reasons for the fall in casino sales. But the resort’s casino had closed on February 23 on a temporary basis as a precaution locally against the spread of the Covid-19 infection. Due to repeated extensions to the shutdown period, the casino did not open again until May 8.
The group had told the Korea Exchange in a filing on May 7 – when it flagged the restart of operations – that Kangwon Land was anticipating its lost casino sales would amount to KRW267.8 billion calculated from the start of the casino shuttering on February 23. The estimate was based on Kangwon Land’s daily casino revenue in full-year 2019, added the scheme’s promoter.
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