GGRAsia – Jeju casino op Landing’s 1H loss narrows to US$80mln

Jeju casino op Landing’s 1H loss narrows to US$80mln

Aug 31, 2021 Newsdesk Latest News, Rest of Asia, Top of the deck

Landing International Development Ltd, creator and operator of Jeju Shinhwa World (pictured), a resort with foreigner-only casino on South Korea’s Jeju island, reported better first-half non-gaming business, but trade at the casino “remained sluggish”, the firm said in a Monday filing to the Hong Kong Stock Exchange.

For the six months to June 30, Landing International reported a HKD623.7-million (US$80.1-million) net loss. It was nonetheless narrowed from the HKD792.2-million net loss in the prior-year period, according to its unaudited interim results.

The improvement was supported by higher group-wide interim revenue, and “stringent cost controls” regarding the group’s operating expenses, the filing stated.

Landing International saw its consolidated revenue for the interim period reach about HKD476.6 million, up 81.8 percent from the HKD262.1 million in the prior-year period. About 74 percent of the group’s interim revenue – circa HKD350.7 million – was derived from non-gaming business at Jeju Shinhwa World.

The increase in group-wide interim revenue was attributable to a previously-flagged “boost in domestic consumption” via local visitors to Jeju Shinhwa World, and an increase in residential property sales, Landing International said.

Jeju Shinhwa World had targeted South Korea’s domestic market, by offering “special staycation packages” and promotions, which helped achieve “rapid sales recovery” in terms of hotel occupancy and non-gaming revenue in the first half, said the firm.

Restrictions remain on inbound foreign tourism to South Korea, amid the ongoing Covid-19 pandemic, the group noted.

Gaming ‘sluggish’

Despite the uplift in domestic demand, Jeju Shinhwa World saw a loss in its non-gaming business amounting to HKD291.7 million for the interim period. The loss was however sharply narrowed from the nearly HKD533.0 million of such loss recorded in the prior-year period.

Trade at the resort’s casino “remained sluggish” during the first half, Landing International said, linking it to a general “dramatic decrease” in the number of Jeju-bound visitors from China and elsewhere in the world.

For the interim period, Landing Casino recorded net revenue of about HKD58.7 million, a decrease of nearly 42 percent on the approximately HKD101.1 million in the prior-year period. The gaming segment loss also widened: to nearly HKD248.0 million, from approximately HKD71.0 million in the prior-year period.

Landing International said it still expected its business to suffer “significant impact” from the pandemic for the second half of 2021, and would continue to focus on the South Korean domestic market, and to implement cost controls.

“In preparation for the post pandemic rebound in the tourism industry, renovation and upgrade of various facilities within Jeju Shinhwa World are under way,” the group said.

Landing International also included in the results filing a brief update on its previously-flagged pursuit of a casino resort scheme in the Philippines.

“Under the lockdown and travel restrictions in the Philippines, the group has yet to identify another suitable lease of land to develop an integrated resort in the Philippines for satisfying the requirement of the provisional [gaming] licence,” Landing International said.

The country’s gaming regulator, the Philippine Amusement and Gaming Corp (Pagcor), had in 2019, prior to the pandemic, granted Landing International more time to find a new piece of land, after an earlier land deal fell through.

“As at the date of this announcement, the group is still in the course of exploring the issue with Pagcor under the travel restrictions,” Landing International stated in the Monday filing.

The group also flagged that its directors had given “careful consideration” to the ‘going concern’ status of the group, as its current liabilities exceeded its current assets by approximately HKD827.1 million, as of June 30.

“The management will pay close attention to the group’ s cash position,” and maintain its “contacts and negotiations with banks, to ensure that the existing bank borrowing will be successfully renewed,” and that “additional banking facilities are obtained when necessary,” the group stated. It stated it did not rule out the possibility of conducting “debt and/or equity fundraising exercises”, should such need arise.