GGRAsia – S. Korea’s Paradise Co August sales slip 2.6 pct y-o-y

S. Korea’s Paradise Co August sales slip 2.6 pct y-o-y

Sep 05, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

South Korean casino operator Paradise Co Ltd said its casino sales for August fell 2.6 percent year-on-year but rose 4.3 percent when judged month-on-month.

The year-on-year decline in August was mainly driven by a 2.7 percent shrinkage in sales from table games, to approximately KRW44.91 billion (US$43.8 million), from nearly KRW46.15 billion in the same month a year earlier. There was no indication in the disclosure as to the reasons.

Sales from machine games fell 0.3 percent in August measured year-on-year, to KRW2.35 billion from KRW2.36 billion in August 2013.

Judged month on month however, sales from machine games showed a sharp decline in August compared to July this year, amounting to a decrease of 13 percent. But the month-on-month performance judged overall was redeemed by a 5.4 percent increase in table game sales.

In Macau, gross gaming revenue market-wide fell 6.1 percent year-on-year in August, but rose 1.6 percent in August from July’s tally.

The year-on-year decline in Macau in VIP revenue in June, July and August has been attributed by investment analysts to a crackdown on corruption in mainland China and a tightening on issuance of transit visas, thus causing Chinese high rollers there to reduce or postpone their visits to Macau.

Mainland China is also the main feeder market for casinos in South Korea.

For the eight months ending August 31, Paradise Co’s casino sales were up 3.9 percent year-on-year, to nearly KRW391.96 billion from KRW377.08 billion in the same period in 2013.

All the company’s numbers were based on sales at the firm’s Paradise Casino Walkerhill (pictured), Paradise Casino Jeju Grand and Paradise Casino Incheon properties – referred to as the ‘casino division’ –, according to a corporate filing to the Korea Exchange.

The casino business division accounted for 82.3 percent of consolidated sales and 98.0 percent of separated sales in 2013.

The filing didn’t give the split between VIP- and mass-table sales. But it did show that for the January to August period, sales generated by gaming machines rose 10 percent to approximately KRW21.27 billion from KRW19.34 a year earlier. Sales from table games were KRW370.69 billion, a more modest rise of 3.6 percent year-on-year.

Table drop – the amount of cash exchanged for chips by customers at the table – rose by nearly 20 percent year-on-year in the January 1 to August 31 period, to nearly KRW3.61 trillion, from KRW3.01 trillion a year earlier.

Paradise Co – which currently features José Mourinho, manager of English Premier League side Chelsea F.C. as its brand ambassador – posted a near 36-percent drop in second quarter profit, despite a strong contribution to table drop by Chinese high rollers.

Paradise Co says it plans to develop ‘Paradise City’ resort, 40 kilometres west of the South Korean capital Seoul. The US$1.7-billion property will include hotels and restaurants, and a foreigners-only casino. The project, to be ready by 2017, is a joint venture with Japan’s Sega Sammy Holdings Inc.