GGRAsia – S.Korea’s Paradise 2Q loss grows as sales plunge

S.Korea’s Paradise 2Q loss grows as sales plunge

Aug 11, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

Paradise Co Ltd, an operator of foreigner-only casinos in South Korea, saw its second-quarter net loss rise to nearly KRW31.88 billion (US$26.9 million), widened from KRW2.46 billion in the opening three months of 2020, and from KRW2.06 billion a year earlier. In a presentation published on Tuesday, the company said its gaming and non-gaming sales plunged amid the Covid-19 pandemic.

Paradise Co saw its overall sales for the second quarter decline by 68.1 percent year-on-year to nearly KRW74.64 billion. The group’s casino sales during the period fell by 65.7 percent year-on-year to just above KRW35.55 billion, due to “travel restrictions” implemented as part of efforts to stem the Covid-19 pandemic, the group said in the document.

The group’s second-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) was negative KRW18.26 billion. That compares with positive EBITDA of nearly KRW32.40 billion in second-quarter 2019, and KRW31.56 billion in the first three months of 2020.

Paradise Co had closed down on March 24 its four casino sites for two weeks, in line with South Korea’s effort at curbing the further spread of the Covid-19 pandemic in the country. Some of the company’s non-gaming offerings – such as entertainment venues – were also closed. The group reopened its casino on Jeju island on April 13. It later resumed operations at its remaining three gaming venues on April 20.

In its latest results presentation, the group said it started to implement cost reduction measures in order to “narrow operating loss” amid the negative impact from the coronavirus. The “restructuring plan” includes paid and unpaid leave for an unspecified period of time, and “voluntary retirement programmes,” stated Paradise Co.

Aside from having an interest in the Paradise City casino resort (pictured), Paradise Co runs three other casino complexes. They are: Walkerhill in Seoul; Jeju Grand on Jeju Island; and Busan Casino in the southern port city of Busan.

Second-quarter overall sales at Paradise City – a venture with Japan’s Sega Sammy Holdings Inc – fell by 75.4 percent year-on-year to KRW26.02 billion. Casino sales at the property during the period decreased by 81.5 percent year-on-year to nearly KRW15.99 billion.

Starting from July 1, the South Korean firm suspended some non-gaming facilities at Paradise City, including Hotel Art Paradiso; club CROMA; the spa CIMER; and the theme park Wonder Box. The suspension of these facilities – due to a spike in the number of Covid-19 infections in South Korea – would remain “until further notice,” according to a notice on Paradise City’s official website.

Paradise Co also stated that the single-greatest contributor in terms of second-quarter casino drop – the amount of cash exchanged for chips by customers at the table – were VIP patrons from nationalities other than Japanese and Chinese, contributing with about 62.3 percent of the aggregate KRW363 billion recorded in the period. Mass-market players contributed with KRW120 billion in the quarter.

Since April 1, travellers to South Korea have been required to undergo a 14-day quarantine on arrival, according to a dedicated Covid-19 information website maintained by the national government. Such measure has resulted in the tally of casino visitors “plunged” in the reporting period, Paradise Co said.