GGRAsia – Jeju casino firm New Silkroad sees 1H ops loss rise

Jeju casino firm New Silkroad sees 1H ops loss rise

Sep 04, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

New Silkroad Culturaltainment Ltd, which has a casino business within a hotel on Jeju Island, South Korea, said its first-half loss from continuing operations ballooned to nearly HKD43.5 million (US$5.6 million) from HKD9.7 million in the prior-year period. It blamed a lack of tourists and temporary closure of its facility due to Covid-19 countermeasures, for the performance.

Revenue for the six months to June 30, fell 56.7 percent, to HKD49.6 million, from HKD114.6 million.

The group’s loss from operating activities grew to almost HKD46.1 million, from nearly HKD8.8 million in the prior-year first half.

Currency exchange differences accounted for costs amounting to HKD66.3 million, versus just under HKD29.5 million a year earlier.

The group has the MegaLuck casino operation (pictured) in the Jeju KAL Hotel on Jeju Island, and distributes wine and baijiu, a Chinese alcoholic drink.

It told the Hong Kong Stock Exchange on Thursday, referring to the casino operation: “Our entertainment business was substantially impacted by the novel coronavirus disease… which resulted in a significant drop in revenue.”

The firm added that during the reporting period, “the imposition of local travel and entry restrictions by the South Korean government caused a sharp reduction of number of tourists to Jeju.”

New Silkroad further noted: “The entertainment revenue plunged by 99.4 percent, to approximately HKD400,000,” compared to HKD63.1 million realised in the first half, 2019.

The group said that during the latest reporting period, “the entertainment business was temporarily suspended to comply with the epidemic prevention measures of the local government”.

The firm added: “The reopening time is yet to be determined.”

New Silkroad stated it had introduced cost-saving measures, “including but not limited to, relocating offices for rental reduction and reducing payroll”.

In its 2019 annual report, filed on May 15 this year, New Silkroad said that a development scheme it planned on Jeju known as Glorious Hill, had “not commenced due to a delay in project financing”.

In 2017, New Silkroad announced that it had taken control of a firm called Macrolink Glorious Hill Co Ltd, putting money into it with a view to developing a big resort complex at Glorious Hill, including a “large-scale casino”.

In its interim report on Thursday, the firm referred only to Glorious Hill having a hotel. It stated: “Though the hotel development project of Glorious Hill was approved for development last year, it was temporarily unable to start due to project financing delays.”