GGRAsia – Kangwon Land revenue up, but profit dips in 2Q

Kangwon Land revenue up, but profit dips in 2Q

Aug 20, 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 profit of KRW97.4 billion (US$81.9 million) for the second quarter of 2015, down by 3.2 percent from the prior-year period.

There are currently 17 casinos in South Korea, but the country’s citizens are only allowed to gamble at Kangwon Land Casino (pictured), 150 kilometres (93 miles) southeast of Seoul in Kangwon province.

The casino operator reported a decline in net profit even as revenue from sales increased 9.3 percent year-on-year to KRW388.9 billion in the three months to June 30. Operating income for the period grew by 19.7 percent to KRW147.9 billion, the firm said in a filing to the Korea Exchange.

The improvement in revenue and operating profit was despite a nationwide health alert in June over an outbreak of Middle East Respiratory Syndrome, known as MERS, that badly hit South Korea’s air travel industry and its inbound tourism market.

In a note in July, Daiwa Securities Group Inc said Kangwon Land was “taking advantage of its dominant position in the Korean-only casino gaming market, even given the unfavourable (in terms of visitors) operating environment as a result of the MERS outbreak in the country”.

The number of foreign tourists visiting South Korea in June fell 41 percent year-on-year, data from the Korea Tourism Organization show.

Rival casino operator Paradise Co Ltd earlier this month posted net profit of approximately KRW12.65 billion for the second quarter of 2015, down 47.1 percent from a year earlier.

Paradise Co operates a network of five foreigners-only casinos located in three major cities in South Korea and on the country’s holiday island of Jeju. The firm said that the number of “visiting days” by VIP gamblers from mainland China at its properties fell 30.7 percent to 18,854 days, compared to 27,192 days in the second quarter in 2014.