S. Korea Paradise Co to return to profit in 3Q: JP Morgan
Brokerage JP Morgan Securities (Asia Pacific) Ltd says it expects South Korean casino operator Paradise Co Ltd to return to profit in the third quarter this year.
“Profitability should improve meaningfully from here given continued ramp of Paradise City [casino resort] and likely improving hold ratio,” analysts DS Kim, Jeremy An and Christine Wang wrote in a note issued on Tuesday, after Paradise Co announced its second-quarter results. They added: “We expect [Paradise Co’s] net profit to turn positive from the third quarter.”
JP Morgan stated it forecast Paradise Co could achieve operating profit of more than KRW33 billion (US$27.2 million) for the second half of this year. That compared to an operating loss of KRW1.57 billion for the first six months of 2019.
The South Korean firm reported a net loss of approximately KRW2.06 billion for the three months ended June 30. It had posted a net loss of about KRW7.53 billion for the first quarter of 2019. For the first six months to June 30, the firm recorded an accumulated loss of approximately KRW9.59 billion, it said on Tuesday.
The last time Paradise Co posted a quarterly profit was for the third quarter of 2018, when the firm reported profit of KRW4.72 billion for the period.
Paradise Co’s casino business division includes four foreigner-only venues. 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, the latter a venture with the Japanese conglomerate Sega Sammy Holdings Inc.
According to JP Morgan, Paradise City’s operating results should “turn profitable from third quarter onward,” helped by a continued ramp-up of both the gaming and non-gaming segments. The venture recorded a net loss of KRW13.24 billion for the second quarter, according to Tuesday’s results. The initial part of phase one of Paradise City launched in April 2017.
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