GGRAsia – S.Korea casino op Landing slips to US$89mln loss in 2018

S.Korea casino op Landing slips to US$89mln loss in 2018

Apr 01, 2019 Newsdesk Latest News, Philippines, Rest of Asia, Top of the deck

Asian casino investor Landing International Development Ltd plunged to a HKD701.5 million (US$89.4 million) loss in 2018, compared to a profit of nearly HKD505.1 million in the prior year. Revenue actually grew sharply in 2018, to nearly HKD2.10 billion, from HKD840.2 million a year earlier.

The basic and diluted loss from continuing operations amounted to HKD0.2387 per share, compared to a loss per share of HKD0.0781 in 2017, the group said in a Sunday filing to the Hong Kong Stock Exchange.

Gaming business revenue for 2018 – derived during most of the reporting period solely from Landing International’s operations at Jeju Shinhwa World (pictured) – rose year-on-year. Such revenue was nearly HKD1.49 billion, compared to HKD179.8 million in 2017.

The Jeju Shinhwa World – with a foreigner-only casino – is located on Jeju Island, South Korea, and opened in February last year. In 2017, the group had run only a smaller operation – now discontinued – at the Hyatt Regency Jeju Hotel nearby.

The firm said the net loss for 2018 was “mainly attributable” to several factors, including the “absence of approximately HKD657 million profit” from discontinued operations relating to a lighting business in mainland China and of gaming business in the United Kingdom.

In September 2017 Landing International had announced a deal to sell its Les Ambassadeurs Club and Casino, an upmarket gaming venue in London in the United Kingdom.

The company made no mention of the prolonged absence during the latter part of 2018 of its chairman, mainland Chinese businessman Yang Zhihui. In late August the firm had said it had lost contact with Mr Yang. Only in a filing in late November did Landing International confirm the entrepreneur was back at work, saying he had been “assisting a relevant department of the People’s Republic of China with an investigation during the period of his absence”.

Jeju, Philippines

Other factors in the expected full-year 2018 net loss were: the absence of HKD210.79 million in “reversal of impairment of trade and other receivables” that had boosted 2017’s numbers; equity investments that were reclassified from fair value through profit or loss to fair value through other comprehensive income, in line with new Hong Kong Financial Reporting Standards effective from January 1, 2018; and an increase in operating expenditures, amortisation and depreciation charges due to progressive opening of various facilities in Jeju Shinhwa World.

The firm said in commentary on the results for the year to December 31: “It is expected that Jeju Shinhwa World’s new resort hotel, Shinhwa Resort, will open in the second quarter of 2019. The Shinhwa Resort will feature over 500 rooms furnished with modern amenities.”

It added: “Together with Marriott Resort, Landing Resort and Somerset Service Condominiums, Jeju Shinhwa World will offer over 2,000 rooms in total to visitors by the end of this year.”

Landing International also gave some commentary on its planned Philippines casino resort. In July the group’s wholly-owned subsidiary, Landing Resorts Philippines Development Corp, had been granted a provisional licence from the local regulator, the Philippine Amusement and Gaming Corp, for a resort at Entertainment City in Manila, an event noted in the filing. Landing International held a ground breaking ceremony for the casino project in August last year.

It added: “In August 2018, the president of the Philippines… expressed his dissatisfaction with the terms of the lease contract entered by Landing Philippines.”

Sunday’s filing further stated: “As at the date of this announcement, the company has not received any official decision from the government of the Philippines regarding this matter… the company will inform the shareholders or potential investors of the company in case any progress of such project.”