GGRAsia – S. Korea’s Paradise Co net profit dips 47 pct in 2Q

S. Korea’s Paradise Co net profit dips 47 pct in 2Q

Aug 06, 2015 Newsdesk Latest News, Rest of Asia, Top of the deck

Second quarter net profit at South Korean casino operator Paradise Co Ltd fell 47.1 percent year-on-year. Such profit was approximately KRW12.65 billion (US$10.8 million) compared to approximately KRW23.93 billion in the year-prior period, the company said in a filing to the Korea Exchange on Thursday.

Paradise Co operates a network of five foreigners-only casinos located in three major cities in South Korea and on the country’s holiday island of Jeju.

During the reporting period, the number of “visiting days” by VIP gamblers from mainland China at Paradise Co properties fell 30.7 percent to 18,854 days, compared to 27,192 days in the second quarter in 2014.

Paradise Co defines VIP visiting days as the daily accumulated number of high roller guests that participated in table games (excluding slot machine guests). In the second quarter 2015, mainland Chinese VIPs accounted for 44.9 percent of the 41,973 VIP visiting days recorded.

The rate of year-on-year decline in the firm’s casino sales in June reached 50.2 percent, it said in a filing on July 6.

The poor June performance coincided with what analysts have said was a fall off in tourism to the country that month in the wake of a nationwide health alert over an outbreak of Middle East Respiratory Syndrome, known as MERS. The number of foreign tourists visiting South Korea in June fell 41 percent year-on-year, said the Korea Tourism Organization

Second quarter pre-tax operational profit at Paradise Co fell 46.9 percent year-on-year. Such profit on operations was KRW16.86 billion compared to nearly KRW31.75 billion in the second quarter of 2014.

The margin made on operations dipped by 7.8 percentage points year-on-year in the second quarter, to 9.3 percent, compared to 17.1 percent a year earlier.

Casino sales slipped 17.6 percent year-on-year in the second quarter, to KRW122.69 billion from approximately KRW148.81 billion in the prior-year quarter. The cost of sales also fell – but at a slower rate; namely 9.5 percent.

Aggregate net sales from the firm’s Walkerhill property in Seoul; from Incheon; and from Busan; from Jeju Lotte (pictured); and Jeju Grand, were KRW153 billion, a fall of 15.0 percent compared to the KRW180 billion achieved in the year-prior period.