South Korean casino operator Paradise Co Ltd on Wednesday reported a net loss of approximately KRW1.7 billion (US$1.5 million) for the three months ended June 30. That compared to a loss of nearly KRW19.5 billion in the second quarter of 2017, the firm said in a filing to the Korea Exchange.
The company had reported a net profit of about KRW3.1 billion for the first three months of 2018. For the six months to June 30, the firm recorded an accumulated profit of approximately KRW1.4 billion, it said.
Paradise Co disclosed an operating loss of KRW67 million for the second quarter of 2018, compared to an operating loss of approximately KRW27.3 billion a year earlier.
The improvement in its latest quarterly results was on higher sales during the period, said the firm. The casino operator stated that total revenue from sales rose by 29.4 percent year-on-year, to nearly KRW181.1 billion in the second quarter.
The company reported casino sales of KRW146.9 billion for the three months to June 30, up 27.9 percent from the prior-year period.
The revenue improvement seen in the second quarter of 2018 reflected an easier comparison from the year-ago period. At the time, according to investment analysts, the South Korean market for inbound tourism was 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.
In a separate presentation published on Wednesday, Paradise Co said casino sales were up due to “solid traffic” from Japanese and other VIP customers, “offsetting weak Chinese VIP demand”.
The number of Chinese visitors to South Korea fell 3.7 percent year-on-year in the first six months of this year, according to data from the Korea Tourism Organization. Chinese tourists accounted for 30.1 percent of all visitor arrivals to South Korea in the six months to June 30.
Paradise Co’s latest casino figures are based on the results of four venues it operates, all foreigner-only casinos, namely: Walkerhill in Seoul; Jeju Grand on Jeju Island; Busan Casino in the southern port city of Busan; and Paradise City (pictured), in Incheon, near the main international airport serving the country’s capital Seoul.
The firm said in its latest presentation that casino drop at its newest and largest resort, Paradise City, had hit “a record high” in the reporting period. Casino sales at the property reached nearly KRW53.5 billion in the second quarter of 2018, up 52.6 percent from a year earlier.
Nonetheless, Paradise City – a venture between Paradise Co and Japanese pachinko operator Sega Sammy Holdings Inc – recorded a net loss of KRW8.1 billion, an improvement on the KRW21.8 billion loss reported in the year-ago period.
Paradise Co reported table drop of KRW1.39 trillion for the second quarter, compared to KRW1.12 trillion in the prior-year period. Chinese VIP patrons to the firm’s casinos accounted for 24.5 percent of the total table drop in the April to June period, according to Wednesday’s statement. Japanese VIP customers accounted for 36.2 percent of the total table drop in the period, with their contribution increasing by 38.7 percent in year-on-year terms.
In a separate filing also on Wednesday, Paradise Co announced that in July its casino sales grew by 23.9 percent year-on-year, to KRW62.4 billion.
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Analyst at Roth Capital Partners