Kangwon Land, Grand Korea Leisure report Q4 profit spikes


kangwon-land-south-korea-casino-revenueSouth Korea’s only locals-allowed casino Kangwon Land reported a double-digit profit rise in 2019 thanks to a strong showing in the year’s final quarter.

Figures released Tuesday show Kangwon Land’s revenue totaled just under KRW393b (US$332.7m) in the final three months of 2019, a 6% rise over the same period last year, while Q4 profit more than doubled to KRW53b as margins rose to 14.2% from 5.4% the year before.

The company was firing on all cylinders in Q4, with gains in mass market tables (+3.7%), VIP tables (+6.2%) and slots (+10.4%). However, revenue from all three verticals suffered a sequential decline from Q3 of nearly 6%.

Nevertheless, Q4’s annual gains were enough to push 2019’s full-year revenue up 5.7% to KRW1.52t, while operating income was up 16.6% to KRW502b and net profit gained 12.7% to KRW335b.

Kangwon Land is perhaps better positioned than its foreigner-only rivals to withstand the reduction in international tourism caused by the ongoing coronavirus crisis. Most of South Korea’s major foreigner-only casino operators have already banned tour groups from China in a bid to minimize their (literal) exposure.

South Korea’s government has banned anyone from China’s Hubei province from entering South Korea, although Health Minister Park Neung-hoo stated a few days ago that the government currently had no plans to expand this restriction to other regions of China, satisfied that maintaining strict testing of all foreigners who arrive at South Korean points of entry would suffice for the time being.

Meanwhile, Grand Korea Leisure (GKL), which operates three Seven Luck-branded casinos, reported this week that its 2019 revenue had risen 2.2% year-on-year to KRW490.7b, while annual profit was down 6.9% to KRW72.4b.

Like Kangwon Land, GKL reported a profit surge in the final quarter of 2019, rising 167.5% to KRW18.3b despite Q4 revenue rising a more modest 17% to KRW130.8b. Last week, GKL reported a strong start to 2020 but China didn’t start imposing travel restrictions until mid-month, so February’s numbers will likely offer a better indication of how GKL is dealing with this challenge.