South Korean casino operator Grand Korea Leisure Co Ltd (GKL) reported a 39.8 percent year-on-year decline in net income for the second quarter of 2017, to KRW15.42 billion (US$13.7 million).
Revenue for the period was down 14.9 percent from the prior-year period, to KRW109.70 billion, the firm said in a filing to the Korea Exchange on Tuesday.
Operating income for the three months to June 30 stood at KRW17.63 billion, a 43.8 percent decrease from the prior-year period, the firm said.
GKL is a subsidiary of the Korea Tourism Organization, which is an affiliated body of South Korea’s Ministry of Culture, Sports and Tourism. The company operates three foreigner-only casinos in South Korea under the Seven Luck brand, two in the capital Seoul and one in the southern port city of Busan.
According to some investment analysts, the South Korean market for inbound tourism is currently facing headwinds due to a political row between that country and China over the siting on South Korean soil of a U.S.-supplied missile system – known as Terminal High Altitude Area Defense (THAAD) – designed to counter North Korea’s ballistic missile programme. The first parts of the system began being deployed in early March.
The number of Chinese visitors to South Korea – an important source of customers for South Korean casinos – fell 41 percent year-on-year in the first six months of 2017, according to data from the Korea Tourism Organization.
In the six months to June 30, GKL recorded revenue of KRW234.98 billion, down 11.5 percent year-on-year. Net income for the period fell by 37.2 year-on-year, to KRW32.96 billion, the company said in its latest filing.
Also on Tuesday, GKL announced an interim dividend of KRW130 per share, amounting to a payout of KRW8.04 billion. The dividend is to be paid on August 31, the firm added.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia