GGRAsia – New Silkroad’s Jeju casino ramps 1H rev, profit

New Silkroad’s Jeju casino ramps 1H rev, profit

Aug 28, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck

Hong Kong-listed New Silkroad Culturaltainment Ltd saw its gaming revenue for the first half of this year on its foreigner-only casino business based on the South Korean holiday island of Jeju grew by 57.8 percent compared to the prior-year period.

Such gaming revenue at MegaLuck casino stood at HKD54.32 million (US$6.9 million) for the first half of this year, according to the firm’s unaudited interim results filed to the Hong Kong bourse on Monday. The casino is housed inside the Jeju KAL Hotel and run via a 72-percent owned entity called MegaLuck Co Ltd.

For the reporting period, the gross profit of the gaming operation at MegaLuck casino increased by 193.7 percent to HKD28.69 million. Such increase has been driven by the growth of business in the VIP gaming operation, the firm said.

“Most of the VIP guests were sourced by our house team with no share of wins, thus resulted in a higher gross profit margin,” the firm noted in the results filing.

The rise seen in the revenue in the MegaLuck gaming operation has also been driven by a “favourable sentiment” following increased Chinese visits to Jeju since the second quarter, New Silkroad Culturaltainment said in the results filing. The firm has also estimated of such upward trend in gaming revenue “to continue until the end of the year”.

“The strong increase [in interim gaming revenue] was driven by higher tourist turnover from China to Korea as a result of gradual improvement of Sino-Korean relationship and the continued expansion of the VIP player market arising from successful promotion campaigns,” the firm said in the Monday filing.

Gaming revenue accounted for 36 percent of New Silkroad’s overall revenue for the first six months this year. The firm is also engaged in the sale and distribution in China of wine and of a Chinese alcoholic drink called baijiu.

The group-wide loss attributable to owners of the firm for the interim period narrowed to approximately HKD14.6 million, down from HKD28.2 million a year earlier.

In its Monday filing, the firm also gave a brief update on its integrated resort project “Glorious Hill”, a site described as close to Hallasan Mountain on Jeju island.

“The development approval of our Glorious Hill resort had passed the provincial congress and we believe it will not be long before the final approval be granted,” the firm said. But the company did not give further details to the content of the project in the interim results filing.

The “Glorious Hill” project – in which New Silkroad has a 55-percent stake – will include five-star hotels, commercial and residential real estate, duty free shopping centre, entertainment complex, healthcare facilities, theme park and golf course, the firm last updated in its annual report 2017 filed in April.