South Korea’s second largest foreigners-only casino operator Grand Korea Leisure (GKL) continued its positive momentum in the third quarter of 2016.
In a filing to the Korea Exchange, GKL said its net income rose 22.9 percent year-on-year to reach KRW27.75 billion (USD24.3 million) in the third quarter of the year. Revenue for the period also grew 20.5 percent to KRW134.04 billion compared to the same period in 2015.
GKL, which operates three foreigners-only casino in the country under the Seven Luck brand, rebounded in the three months to September 30 from its lackluster performance in the prior-year period, when it same its net income fall 41.5 percent in the aftermath of the Middle East Respiratory Syndrome (MERS) outbreak, which greatly affected the tourism industry of South Korea—including the performance of South Korean casinos—last year.
The Korea Tourism Organization subsidiary also recorded a net income of nearly KRW80.20 billion in the first nine months of 2016, a 9.4 percent surge from a year earlier. Revenue for the period also rose 4.5 percent year-on-year to KRW399.61 billion, while operating profit increased 11.7 percent to KRW108.05 billion.
Paradise Co profits fall in Q3
Meanwhile, sitting at the opposite end of the profit spectrum is GKL’s rival, Paradise Co Ltd, which saw its profit dip 14.8 percent year-on-year in the third quarter of 2016.
In a separate filing to the Korea Exchange, the South Korean casino operator said its profit reached KRW10.46 billion (US9.2 million)—a drop compared to the KRW12.26 billion the company posted in the same period in 2015.
Paradise Co, which operates four foreigner-only casinos in Seoul, Incheon, Jeju and Busan, said the labor costs in the third quarter was pushed by the “early retirement” expense, which totaled KRW12.8 billion.
Aggregate sales revenue group wide for the period ending September 30 grew 22.7 percent year-on-year to KRW175.21 billion, partly due to casino sales, which accounted for 84.3 percent of group sales for the third quarter. Casino sales rose 25.8 percent year-on-year to KRW147.77 billion, while the cost of all third-quarter sales rose to 83.9 percent year-on-year to KRW147.06 billion.
Paradise Co said Chinese VIPs as a group was the largest contributor to its Paradise Co’s soft drop. In the third quarter 2015, Chinese VIPs had contributed KRW586 billion of soft drop, while Japanese players contributed KRW268 billion.
