GGRAsia – Paradise Co 3Q profit up 12pct, helped by Paradise City

Paradise Co 3Q profit up 12pct, helped by Paradise City

Nov 09, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck

Third-quarter profit at South Korea’s Paradise Co, an operator of foreigner-only casinos in that country, rose 11.6 percent year-on-year, on group sales that grew by 7.3 percent, the firm said in a Thursday statement.

Such profit was just under KRW4.72 billion (US$4.21 million), compared to just under KRW4.23 billion in the prior-year quarter.

Group sales for the period were KRW210.5 billion, from KRW196.1 billion a year earlier.

Casino sales for the three months to September 30 rose 5.9 percent, to nearly KRW164.7 billion, from KRW155.6 billion.

The document showed that casino sales at Paradise City (pictured), a casino resort at Incheon that opened in April 2017 – run with a Japanese partner – were nearly equal in the third quarter to Paradise Co’s consistently best-performing property, Paradise Walkerhill in Seoul.

Paradise City third-quarter casino sales were about KRW677 million, compared to Walkerhill’s KRW685 million.

The data also indicated that casino drop contributed by Chinese VIPs had improved sequentially at Paradise Co’s properties since the end of the fourth quarter 2017, although had not yet recovered to the quarterly level recorded as of the end of the third quarter 2017.

A number of investment analysts had previously noted that South Korea’s foreigner-only casino market had been adversely affected in 2017 after a fall-off in Chinese tourism after a row between China and South Korea over a United States-supplied missile system.

Third-quarter 2018 casino drop from Chinese VIPs was KRW402 billion, or 27.7 percent of the just over KRW1.45 trillion in total quarterly drop. For the reporting period, the largest contribution came from Japanese VIPs, with KRW521 billion.

“Paradise City’s casino drop amount hit to a record high again,” said the firm in some commentary on the results.

It added regarding that property: “Solid casino growth continued to be led by Japan and other VIPs… Drop amount rose for the fourth straight month.”

The management at Paradise City has been increasing the amount and type of non-gaming entertainment as part of efforts to draw fresh guests from across the region. Last week it was announced that a theme park would open at Paradise City in the first half next year. Paradise City is run by Paradise Segasammy Co Ltd, a joint venture by Japan’s Sega Sammy Holdings Inc and Paradise Co.

For Paradise Co’s third-quarter as a whole, and on a segmented basis, combined casino sales at the Walkerhill, Jeju Grand and Busan properties fell 3.0 percent year-on-year “due to weak performance” in Jeju Grand and Busan, the firm said.

On a group-wide basis, Paradise Co hotel sales rose 13.8 percent, to just shy of KRW39.35 billion.

The cost of group-wide sales rose also in the reporting timeframe – by 10.4 percent – to KRW180.25 billion.

Operating profit rose 3.5 percent, to just under KRW10.81 billion, but operating profit margin fell by 2 basis points, to 5.1 percent.

Group earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 8.2 percent year-on-year, to KRW29.77 billion.