Paradise Co Ltd, a South Korean operator of foreigner-only casinos, reported a 34.9-percent year-on-year decline in its first-quarter operating profit to approximately KRW37.31 billion (US$25.7 million).
Factors included the cost of acquiring additional hotel space near to its joint-venture Paradise City casino resort. That has now been branded as “Hyatt Regency Incheon Paradise City” (pictured).
The information was in Paradise Co’s first-quarter business updates lodged with the Korea Exchange on Wednesday, and its supplementary financial highlights issued the same day.
The casino operator’s first-quarter sales amounted to nearly KRW293.97 billion, up by 3.8 percent year-on-year. Of that tally, around 78 percent – or KRW228.86 billion – was casino sales.
The 3.8-percent improvement in Paradise Co’s first-quarter sales was due to the effect of consolidating revenue from the recently-acquired Hyatt Regency Incheon Paradise City, which amounted to approximately KRW6.1 billion, the firm noted.
Paradise Co directly operates three casino venues: Walkerhill in Seoul; Paradise Jeju on Jeju island; and a property in the port city of Busan. The casino operator also has a venture with Japan’s Sega Sammy Holdings Inc that runs the Paradise City casino resort at Incheon, home to South Korea’s main air hub, Incheon International Airport.
First-quarter casino sales generated from Paradise City were up 2.4 percent year-on-year to KRW112.73 billion. Casino sales from the other three gaming venues directly run by the group reached KRW116.13 billion in the period, up 0.5 percent year-on-year.
Paradise Co said its first-quarter operating profit was down 34.9 percent year-on-year, as its operating expenses rose in the quarter. It also reported “sluggish” sales performance in March.
The firm’s first-quarter operating expenses rose 13.6-percent year-on-year, due to the impact of the acquisition of Hyatt Regency Incheon Paradise City – formerly the west wing of the Grand Hyatt Incheon Hotel – as well as other expenses including costs for labour, advertising and promotions.
Group-wide earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at KRW57.53 billion in the first quarter, down 24.4 percent year-on-year.
The firm’s first-quarter net profit declined by 56.3 percent year-on-year to KRW18.85 billion.
In addition to the first-quarter business updates, Paradise Co reported on Wednesday its April casino sales, which rose 80.6 percent sequentially to KRW87.92 billion. Measured year-on-year, they went up 30.7 percent.
The April numbers took Paradise Co’s casino sales of the first four months of this year to nearly KRW316.81 billion, up 8.2 percent year-on-year.
