GGRAsia – Paradise Co posts ‘record’ quarterly op profit in 3Q

Paradise Co posts ‘record’ quarterly op profit in 3Q

Nov 09, 2023 Newsdesk Latest News, Rest of Asia, Top of the deck

Paradise Co Ltd, an operator of foreigner-only casinos in South Korea, reported net profit attributable to shareholders of KRW35.26 billion (US$27.0 million) for the three months to September 30, according to a presentation published on Thursday. That was up 19.9 percent from the preceding quarter, but down 10.4 percent from a year earlier.

The company said it generated its “highest ever quarterly operating profit” in the three months to September 30, at KRW57.13 billion. The figure was up 4.1 percent sequentially, and up 49.0 percent from a year ago.

The casino firm reported third-quarter aggregate sales of almost KRW285.58 billion, up 3.7 percent sequentially, and a 50.7-percent increase from the prior-year period.

The company said however that its aggregate casino sales in the July to September period declined by 13.8 percent quarter-on-quarter, to KRW115.81 billion. They were up 62.1 percent from a year earlier.

Casino sales referred to the three casino venues Paradise Co runs directly: Walkerhill in Seoul; Paradise Jeju on Jeju island; and a property in the port city of Busan.

JP Morgan Securities (Asia Pacific) Ltd stated in a Thursday memo that Paradise Co “reported another record quarter,” with operating profit “jumping to … an all-time high”.

“Gross gaming revenues has fully recovered to pre-Covid levels, thanks to solid performance across segments,” wrote analysts DS Kim, Mufan Shi and Selina Li.

They added: “Japanese VIPs (45 percent of total drop) and mass demand (20 percent of drop) continued to climb to hit 125 percent and 115 percent of pre-Covid levels, respectively; and Chinese VIPs (15 percent of drop) started to rebound (albeit from a low base) to reach 66 percent recovery rate versus 42 percent in the second quarter.”

The company reported earnings before interest, taxation, depreciation, and amortisation (EBITDA) of just below KRW77.13 billion, up 2.8 percent sequentially. The EBITDA figure was up 24.9 percent from a year ago.

Sales from “integrated resort” operations – from its venture with Japan’s Sega Sammy Holdings Inc at the Paradise City resort (pictured) at Incheon – rose 21.3 percent quarter-on-quarter, to nearly KRW132.66 billion. Judged year-on-year, such sales increased 68.1 percent.

The integrated resort sales figure incorporates casino, hotel and theme park sales at Paradise City. Casino sales at Paradise City stood at KRW97.81 billion in the three months to September 30, up 19.0 percent sequentially, and a 119.8-percent increase from the prior-year period.

The Paradise City property generated EBITDA of KRW41.43 billion, up 46.2 percent quarter-on-quarter, and an increase of 64.4 percent year-on-year. Paradise Co said sales at the complex continued to grow in the third quarter, with the property’s operating profit and EBITDA reaching a “record high”.

Brokerage NH Investment & Securities Co Ltd suggested in September that the resumption of Chinese group tours should boost South Korea’s inbound visitor traffic and eventually contribute to a “sharp recovery” in the number of mass-market foreign customers to the latter nation’s casinos.

(Updated at 7am, Nov 10)