GGRAsia – Paradise narrows 3Q loss sequentially, as revenue improves

Paradise narrows 3Q loss sequentially, as revenue improves

Nov 10, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

Paradise Co Ltd, an operator of foreigner-only casinos in South Korea, says its third-quarter net loss stood at KRW16.30 billion (US$14.62 million), down from the nearly KRW31.88-billion loss recorded in the preceding quarter. The company said in a Tuesday filing that aggregate sales for the reporting period rose by 21.3 percent sequentially, to KRW90.55 billion, but were down 67.0 percent from a year earlier.

In a separate presentation published on Tuesday, the company said visitor traffic to its casino properties during the third quarter “plunged” as South Korea was still imposing a 14-day quarantine on foreign travellers as a countermeasure against the Covid-19 pandemic.

The group’s casino sales in the third quarter fell by 62.8 percent year-on-year to KRW40.11 billion, but was up 12.8 percent from the second quarter, according to Tuesday’s presentation.

Third-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) was negative to the tune of KRW5.23 billion. That compares with positive EBITDA of nearly KRW65.61 billion in third-quarter 2019, and negative KRW18.26 billion in the second quarter of 2020.

The South Korean firm runs operations at Walkerhill in Seoul; Jeju Grand on Jeju Island; and Busan Casino in the southern port city of Busan. The firm also runs a foreigner-only gaming venue at Paradise City in Incheon, near South Korea’s main airport, under a venture with Japan’s Sega Sammy Holdings Inc.

In September, Paradise City’s casino had been closed from September 1 due to several staff members testing positive for Covid-19. It reopened again on September 9.

Paradise Co highlighted in its results presentation that group-wide “cost-saving” measures implemented during the reporting quarter had helped narrow its operating loss to nearly KRW31.06 billion, from KRW44.51 billion in the preceding three months. The firm had mentioned in its previous quarterly results that it had started a “restructuring plan”, which included paid and unpaid leave for its employees for an unspecified period of time, and “voluntary retirement” programmes.

The firm’s third-quarter aggregate sales at Paradise City fell by 78.4 percent year-on-year to nearly KRW29.25 billion. Casino sales at the property during the period declined by 86.0 percent year-on-year to nearly KRW15.13 billion, which the group attributed to the impact of Covid-19.

During the reporting period, hotel sales at Paradise City improved sequentially, helped by “domestic demand”, stated the South Korean firm in Tuesday’s presentation. But several non-gaming facilities at the casino resort complex – including some entertainment venues and a number of food and beverage outlets – are currently closed as part of “social distancing” measures against the spread of Covid-19, according to a notice on Paradise City’s official website.

Paradise Co also stated that the single-greatest contributor in terms of third-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 64.1 percent of the aggregate KRW387 billion recorded in the period. Mass-market players contributed with KRW130 billion in the quarter.