Kangwon Land revenue falls 63.5% in first half
Korean casino and resort operator Kangwon Land’s revenue fell 63.5% to KRW270.64bn (£174.6m/€193.9m/$228.7m) in the first half of 2020, after its venues were open only to VIP customers for much of the second quarter of the year.
Of Kangwon Land's revenue, KRW228.8bn came from casino gaming.
Of this total, just under half came from table games, at KRW101.8bn. Slot machine revenue came to KRW87.3bn while VIP room revenue benefited from these rooms being the first to reopen and came to KRW64.8bn. Meanwhile, KRW21.9bn was paid back out to players in bonuses.
Non-casino revenue came to KRW42.4bn, with hotels making up KRW19.9bn of this total and skiing a further KRW10.2bn. Condos broughts in KRW9.0bn and golf KRW2.2bn.
Kangwon land made an operating loss of KRW290.59bn for the first half, compared to a profit of KRW297.87bn in 2019, while pre-tax losses came to KRW292.70bn.
Kangwon Land’s net loss for H1 totalled 201.68bn, a sharp fall from a net profit of KRW153.39bn in H1 of 2019.
Turning to the three months ending 30 June, the operator reported revenue of KRW34.63bn, down 90.5%, of which KRW28.3bn came from casino gaming, down 91.4%.
With Kangwon Land’s casino operations closed to most of the general public for the entire second quarter, only its VIP rooms could generate gaming revenue. Therefore all of gaming's contribution came from VIP rooms, with table and slot revenue from the casino floor falling to zero. Before accounting for the KRW3.6bn in bonuses, revenue from these rooms fell 48.2% to KRW31.9bn.
This came on stakes of KRW145.0bn, down 90.9% and from just 2,364 customers, down 99.6%.
Among non-gaming sources, a 92.0% decline in hotel revenue to KRW2.0bn allowed golf to be the largest contributor, as revenue stayed stable at KRW2.2bn. Condo revenue fell 64.1% to KRW1.5bn and ski revenue fell 44.2% to KRW400m while revenue from Kangwon Land’s Water World waterpark fell 99.5% to less than KRW20m. Meanwhile, the contribution from other subsidiaries dropped 73.4% to KRW200m.
Costs of sales for the quarter came to KRW118.3bn, down 12.7%, leaving a gross loss of KRW83.6bn. Following general management expenses of KRW20.2bn, down 63.9%, Kangwon Land’s operating loss came to KRW103.81bn.
The operator made a further KRW6.6bn in non-operating income, a 7.3% increase, and KRW13.6bn in financial income, a drop of 34.5%. Other income came to KRW11.3bn, after the business made a KRW82.9bn loss in this area in Q2 of 2019.
This led to a pre-tax loss of KRW72.33bn, after the business had made a KRW116.83bn profit the year prior.
After receiving a KRW26.77bn tax benefit, Kangwon Land’s net loss came to KRW45.56bn. In Q2 of 2019, Kangwon land made a profit of KRW50.94bn.
The business flagship casino in Jeongseongun reopened to the public on 1 July after being closed since 23 February due to the novel coronavirus (Covid-19) pandemic.
This followed a temporary “rehearsal” opening on 27 May, which the operator said helped it identify and deal with shortcomings in its reopening plan. In addition, Kangwon land will sterilise casino chips and will place notices around its properties to remind customers to respect social distancing requirements.