GGRAsia – Kangwon Land posts 13-pct profit increase in 3Q

Kangwon Land posts 13-pct profit increase in 3Q

Nov 12, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Kangwon Land Inc, the operator of the only casino resort in South Korea where the country’s nationals are allowed to gamble, reported net income of KRW119.0 billion (US$103.1 million) for the third quarter of 2015, up by 12.8 percent from the prior-year period.

Revenue from sales increased 5.0 percent year-on-year to KRW413.5 billion in the three months to September 30. Operating income for the period grew by 18.9 percent to KRW157.9 billion, the firm said in a filing to the Korea Exchange on Tuesday.

Kangwon Land also posted sequential improvements in net income and revenue – 22.2 percent and 6.3 percent respectively. That was after its second quarter performance was partially impacted by a nationwide health alert in June over an outbreak of Middle East Respiratory Syndrome, known as MERS, that badly hit South Korea’s tourism industry.

Rival casino operator Grand Korea Leisure Co Ltd – which currently operates three foreigners-only casinos in South Korea under the Seven Luck brand – saw its net income fall 41.5 percent year-on-year in the third quarter, the firm said in a filing to the Korea Exchange also on Tuesday.

Thomas Y. Kwon, an analyst at Daiwa Securities Capital Markets Korea Co Ltd, stated in a note following Kangwon Land’s third quarter results that management had expressed an intention to “continue to control [the property's] operating expenses tightly”.

He added: “We think the company would likely see solid visitor growth and gaming demand for slots and mass-table games in the fourth quarter of 2015 and [in] 2016. We forecast Kangwon Land’s revenues and operating profit to increase by 9.9 percent year-on-year and 14.6 percent year-on-year in 2016, respectively.”

The South Korean government is currently conducting a request for proposal process for up to two new integrated resort licences in that country, with casinos that will be opened to foreigners only. At least two Asian casino firms – Grand Korea Leisure and Cambodia’s largest operator, NagaCorp – earlier this week publicly stated they would not be taking part in the process.