While casino operators around the world are scrambling to trim excess expenses and figure out how to avoid further revenue losses caused by the coronavirus pandemic, one company is headed in the opposite direction. South Korea’s Grand Korea Leisure (GKL), a subsidiary of the Korea Tourism Organization (KTO) and the operator of foreign-only casinos, recorded growth in its net income in the first quarter of the year, at the same time other gambling companies are seeing their numbers continue to slide. According to a filing by GKL with the Korea Exchange today, its net income exploded by more than 68% in the first quarter compared to the beginning of 2019.
$12.1 million was the magic number for the Q1 profits, substantially more than the $7.16 million the company saw a year earlier. The results are made better by the revelation that GKL’s sales only increased by 2.1% when comparing the two periods, reaching $9.43 million. Tacking on the fact that the company shut down its three Seven Luck casinos as of March 24, and the picture gets even better. Operating profit also increased, reaching $22.08 million in the quarter for a 58.5% jump. GKL has obviously figured out ways to reduce costs over the past year to improve its bottom line.
Two of the three Seven Luck casinos are in Seoul, South Korea, while the third is on the country’s southern coast in the city of Busan. The trio saw their combined revenue take a nosedive in March, when the take was 72% lower year-on-year. First-quarter casino sales for GKL took a hit because of it, but still managed to improve by 1.8% to close at $90.39 million.
The increase in performance is definitely going to help the company survive the COVID-19 debacle, and the improvement will most likely be wiped out by the end of this quarter. GKL missed out on revenue for the end of March and the entire month of April, and just now began opening its casino doors to the public. With a tendency of the general public to still be shy when it comes to venturing back out into the real world, and international travel still at lower levels, the odds on the Seven Luck casinos to attract patrons remain low.
If the financial performance of local casino rival Paradise Co. is any indication, GKL is undoubtedly going to report a dismal second quarter. Paradise Co., which offered partial openings in April, reported that its overall performance for the month was 57.8% lower compared to March, and 86.1% lower against April 2019. One of Paradise’s casinos, Jeju Grand, was only shut down for 13 days, while the other three reopened on April 20.
