South Korean casino operator Paradise Co Ltd on Monday reported net income of approximately KRW1.27 billion (US$1.14 million) for the three months ended March 31, down 92 percent from the prior-year period.
The company reported an operating loss of approximately KRW7.70 billion for the first three months of 2017. That compares to an operating profit of KRW15.34 billion in the first quarter of 2016.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) declined by 93.6 percent year-on-year to KRW1.44 billion, the firm said in a filing to the Korea Exchange.
The casino operator said total revenue fell by 9.3 percent year-on-year in the first quarter to about KRW142.4 billion, from approximately KRW157 billion in the prior-year quarter.
The company reported casino sales of KRW124.6 billion for the three months to March 31, down by 9.7 percent from a year earlier.
Paradise Co said the casino figures were based on its “casino business division”, comprising the venues Walkerhill in Seoul; Jeju Grand on Jeju Island; a property at Incheon; and one at Busan. Jeju Lotte is not included in the monthly data.
First-quarter 2017 casino drop – measured as the amount of cash exchanged for chips by customers at casino tables during the period – was down 2.7 percent year-on-year, at nearly KRW1.20 trillion, compared to KRW1.23 trillion in the first three months of 2016.
Chinese VIP patrons to Paradise Co’s casinos accounted for 44.6 percent of the total table drop in the period, according to Monday’s statement. But total table drop by Chinese VIP patrons fell by 17.9 percent year-on-year, to KRW535 billion.
The number of Chinese visitors to South Korea fell 39 percent year-on-year in March, reported Reuters news agency. The dip coincided with a diplomatic row between China and South Korea over the latter’s installation, starting in early March, of a U.S.-supplied missile system.
Paradise Co said table drop from Japanese VIP patrons increased 8.1 percent year-on-year to KRW320 billion in the three months to March 31. The company recorded “solid growth” in the mass-market segment during the reporting period, with a 48.8-percent increase from the prior-year quarter, it said.
Paradise Co opened on April 20 its newest casino resort – Paradise City – in Incheon, near the main international airport serving the country’s capital Seoul. Paradise City (pictured) is a joint venture project between Paradise Co and Japanese pachinko operator Sega Sammy Holdings Inc
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”Continued negative coverage of the Abe administration, coupled with political losses for the Liberal Democratic Party ... may reduce support for the gaming agenda, which already has only limited public support”
Analyst at brokerage Sanford C. Bernstein