Paradise Co swings into red in 1Q as casino sales slide
South Korean foreigner-only casino operator Paradise Co Ltd on Tuesday reported a net loss attributable to shareholders of approximately KRW7.53 billion (US$6.35 million) for the three months ended March 31. That compares with a net profit of nearly KRW3.10 billion for the prior-year period.
The company reported an operating loss of approximately KRW6.27 billion for the first quarter of 2019, compared to an operating profit of KRW4.81 billion a year earlier, according to a filing to the Korea Exchange.
The company said the net loss reflected a negative impact from the adoption of new accounting standards, which led to an increase in, among other items, financial expenses during the period.
The net loss for the first quarter was despite a jump in revenue during the reporting period. Paradise Co said total revenue rose by 12.4 percent year-on-year in the first quarter to nearly KRW201.72 billion, from approximately KRW179.51 billion in the prior-year quarter.
The first-quarter revenue included casino sales of nearly KRW86.68 billion for the three months to March 31, down 6.4 percent from a year earlier.
Paradise Co’s casino figures are based on the results of four venues it operates in its casino business division. They are: Walkerhill in Seoul; Jeju Grand on Jeju Island; Busan Casino in the southern port city of Busan; and Paradise City (pictured), in Incheon, near the main international airport serving the country’s capital Seoul.
The casino operator said sales in its Walkerhill, Jeju Grand and Busan casinos declined by 5.7 percent year-on-year, due to “weak hold ratio of 8.2 percent”.
At Paradise City resort – a venture with the Japanese conglomerate Sega Sammy Holdings Inc – casino sales “hit a record high again”, said Paradise Co. Casino revenue at the property in the opening three months of 2019 was nearly KRW74.78 billion, up 34.4 percent from the year ago period, added the firm.
The venture nonetheless recorded an operating loss of about KRW7.12 billion in the first quarter of 2019, compared with an operating profit of KRW886 million in the prior-year period.
The company said operation costs related to the property rose following the opening of Paradise City’s phase-one, second stage last year. A theme park called Wonderbox was opened at the casino resort on March 31, the firm confirmed in its Tuesday filing.
The company further stated the group’s casino drop increased during the period, backed by a “recovering” of “China VIP”. Casino drop stood at KRW1.62 trillion in the first three months of 2019, up 19.2 percent year-on-year, with Chinese VIP accounting for 32.5 percent of the aggregate drop in the period.
The group said all of its other business segments recorded an increase in revenue during the reporting period. But the firm’s costs rose by 19.7 percent year-on-year, to nearly KRW190.54 billion.
Earnings before interest, taxation, depreciation and amortisation fell by 6.0 percent, to approximately KRW20.97 billion.
Paradise Co reported a narrower loss for calendar year 2018, at KRW10.97 billion, from KRW18.95 billion in full-year 2017.
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