Paradise Co 2Q profit dips as marketing costs bite

Aug 09, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck  

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Paradise Co Ltd, an operator of foreigner-only casinos in South Korea, reported net income attributable to shareholders of nearly KRW14.55 billion (US$10.7 million) for the second quarter of 2024, according to a filing published on Friday.

Such income was down 50.5 percent from the prior-year period, and declined by 43.9 percent from the preceding quarter.

The casino firm had second-quarter aggregate sales of KRW273.26 billion, down 0.7 percent from a year earlier, but a 3.2-percent increase quarter-on-quarter.

The casino firm reported operating profit of KRW32.01 billion for the three months to June 30, down 41.7 percent year-on-year. The figure was 33.9-percent lower than the preceding quarter.

The company recorded an operating profit margin of 11.7 percent in the April to June period, down sequentially and from a year ago.

The decrease was “due to increasing marketing costs,” stated the firm.

In July, outside the reporting period, Paradise Co said it would open in September a new space specially for high-roller gamblers at its Paradise Casino Walkerhill casino, in Seoul.

The company also plans to integrate the operating systems of its four casinos at, respectively, Seoul, Incheon, Busan and Jeju, to optimise marketing efforts, noting that it has an existing customer base of 1.07 million individuals.

Paradise Co reported second-quarter earnings before interest, taxation, depreciation, and amortisation (EBITDA) of just under KRW51.89 billion, down 30.8 percent from a year ago. The EBITDA figure fell by 23.8 percent sequentially, according to a separate presentation deck published on Friday.

The company stated that its aggregate casino sales in the three months to June 30 declined by 16.7 percent year-on-year, to KRW111.96 billion. They were up 9.5 percent from the first quarter this year.

The company said in the presentation deck that its business showed “high performance” in the Japan VIP and mass segments during the period. But the increase in the number of VIP customers resulted in “increasing comp costs,” it added.

Sales from “integrated resort” operations – from its venture with Japan’s Sega Sammy Holdings Inc at the Paradise City resort (pictured) at Incheon – increased 20.1 percent from the prior-year period, to about KRW131.40 billion. Judged quarter-on-quarter, such sales declined by 0.7 percent.

The integrated resort sales figure incorporates casino, hotel and theme park sales at Paradise City. Casino sales at Paradise City stood at KRW102.52 billion in the three months to June 30, up 24.7 percent year-on-year, but flat sequentially.

The Paradise City property generated EBITDA of KRW25.08 billion, down 11.5 percent from a year earlier, and 38.6-percent lower quarter-on-quarter.

In late June, Paradise Co shares started trading via the country’s KOSPI stock index.

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