GGRAsia – Casino op Paradise Co cuts 1Q loss, virus pain from March

Casino op Paradise Co cuts 1Q loss, virus pain from March

May 12, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

Paradise Co Ltd, an operator of foreigner-only casinos in South Korea, narrowed its first-quarter loss, the firm told the Korea Exchange on Tuesday.

Such loss was KRW2.46 billion (US$2 million), versus KRW7.53 billion in the prior-year quarter, a 67.3 percent improvement.

Sales fell 8.5 percent year-on-year, to just under KRW184.67 billion, from nearly KRW201.72 billion. Compared to the fourth quarter 2019, sales slipped 31.5 percent. The firm had recorded sales of KRW269.45 billion in the three months to December 31.

Casino sales slipped 9.7 percent, to KRW78.27 billion, compared to KRW86.68 billion in the prior-year period.

Towards the end of the first quarter, Paradise Co had said it was closing down on March 24 its four casino sites for two weeks, in line with the country’s effort at curbing the further spread of the Covid-19 pandemic in South Korea. Some of the company’s non-gaming offerings – such as entertainment venues – were also closed. The firm reopened its casino on Jeju island on April 13. It resumed operations at its remaining three gaming venues on April 20.

Earlier this month, the firm said that its casino revenue had fallen 86 percent year-on-year in April amid Covid-19 disruption.

For the three months to March 31, at its Paradise City resort (pictured) near Incheon Airport, South Korea’s main air hub, “the impact of overseas travel restrictions related to Covid-19” was “reflected in first-quarter casino business,” said the firm in an earnings presentation.

It added that while January casino sales at Paradise City – run as a venture with Japan’s Sega Sammy Holdings Inc – had risen 36 percent year-on-year, and those for February 32.4 percent, in March casino sales had slumped 70 percent.

The group noted that many non-gaming entertainment facilities at Paradise City had been shut from March 1 to May 1.

The firm said in commentary that cost control at Paradise City was “to continue” in the second quarter, with measures in the first quarter having resulted in adjusted costs down 47.8 percent year-on-year.

“Reducing labour cost will further accelerate backed by offering paid leave,” and use of an “employee retention grant programme” run by the South Korean government.

Paradise Co runs – as well as having an interest in Paradise City – three other casino complexes. They are: Walkerhill in Seoul; Jeju Grand on Jeju Island; and Busan Casino in the southern port city of Busan.

For casino operations at the group as a whole in the quarter, Japanese VIPs made the greatest-single group contribution to that quarter’s KRW1.16-trillion in soft drop: the latter refers to the amount of cash exchanged for chips by customers at the table. Japanese VIPs provided circa KRW373 billion; Chinese VIPs brought KRW318 billion; VIPs from other markets contributed a further KRW261 billion, and mass-market players brought in KRW212 billion.