South Korean foreigner-only casino operators Paradise Co and Grand Korea Leisure released their financial results for the September quarter on Tuesday, but with international borders still closed due to COVID-19 there is little to be read into them.
That’s despite Paradise – which runs Paradise Walkerhill in Seoul, Jeju Grand, Busan Casino Paradise and Paradise City in Incheon – beating consensus with casino sales up 43.8% versus 2Q21 to KRW121.76 billion (US$103.4 million) and EBITDA turning positive again at KRW30 billion (US$25.5 million).
According to JP Morgan’s DS Kim, Amanda Cheng and Livy Lyu, such trends provide limited value to forward estimates with foreigner-only casinos “just treading water in the absence of an inbound market, only serving local expats in the past 1.5 years with very limited up- ordownside.
“A major breakthrough can only come from an easing of bilateral travel policies with key source markets (China and Japan), the timing and extent of which is impossible for us to predict, although it’s probably not going to happen in the next six months or so,” they wrote.
While good luck helped Paradise book an operating profit of KRW5 billion (US$4.2 million), GKL saw casino sales fall 23.4% quarter-on-quarter to KRW25.26 billion (US$21.5 million)with operating loss widening to KRW30.83 billion (US$26.2 million). Net loss attributable to shareholders was KRW23.41 billion (US$19.9 million).
GKL operates three casinos in South Korea – Gangnam COEX and Gangbuk Millenium Seoul Hilton in Seoul, and Seven Luck Casino Busan Lotte.
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