Kangwon Land Inc., the operator of the eponymous resort that hosts the only casino in South Korea open to locals, saw a 69.8% year on year jump in net profit in the fourth quarter to KRW47.4 billion (US$42.7 million), while operating profit surged 188% to KRW119.2 billion ($107.5 million).
Gaming revenue, which constituted 94.2% of the company’s total revenue, was up a more subdued 12.3% to KRW351.8 billion ($317.2 million), with the profit rise attributed to effective cost control measures, as well as to the strong performance of its high-margin slot machine operations
Daiwa Securities analyst Thomas Kwon expressed confidence in Kangwon Land’s new chief executive officer, who was appointed in November 2014. Mr Kwon said the company’s strong performance during the fourth quarter indicated that its management team had focused its attention on making casino operations even more effective and reorganizing “overall service divisions”. He also added that company executives do not see further capacity expansion as a priority as a priority at the moment, preferring instead to focus on raising the productivity of its existing operations.
Kangwon Land’s full-year net profit reached KRW359.3 billion ($323 million), up 20.8% from 2013. Total revenue in 2014 rose 10% to KRW1.5 trillion ($1.4 billion), while gaming revenue gained 11.1% KRW1.4 trillion ($1.3 billion).
Daiwa’s forecasts a 9% increase in Kangwon Land’s table gaming revenue in 2015, and an 18% increase slot machine revenue.
Apart from Kangwon Land, South Korea has another 16 casinos where only foreigners are permitted to play.
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