A one-off gain from the sale of a building was enough to push South Korea’s Paradise Co back into profit in the three months to 30 June 2022, helped along as well by improved hotel and integrated resort sales following the recent easing of COVID-19 border closures.
The foreigner-only casino operator reported profit attributable to controlling interests of KRW18.6 billion (US$14.4 million), largely in line with its 2Q21 result but reversing a KRW28.6 billion (US$22.0 million) loss in the March quarter of this year.
This was “backed by a KRW68.6 billion (US$52.9 million) one-off gain from a disposal of [a] building”, while sales grew 24.3% year-on-year to KRW105.2 billion (US$81.1 million). Although casino sales dipped by 5.8% to KRW28.8 billion (US$22.2 million), hotel sales were up 31.4% to KRW28.4 billion (US$21.9 million) and integrated resort sales up 42.1% to KRW45.2 billion (US$34.8 million).
Adjusted EBITDA was KRW2.91 billion (US$2.2 million), reversing a KRW2.54 billion (US$2.0 million) loss in 2Q21 and a KRW1.49 billion (US$1.1 million) loss in 1Q22.
Those numbers are expected to continue improving following the removal of a mandatory hotel quarantine requirement for unvaccinated international visitors from 8 June. Korea also resumed the issuance of tourist visas for the first time in more than two years as of 1 June.
In outlining its results Paradise said it had enjoyed strong hotels sales growth due to strong domestic demand in Q2, particularly at its Incheon integrated resort Paradise City – a joint venture partnership with Japan’s Sega Sammy Holdings. Paradise holds a 55% stake in Paradise City.
The company saw casino sales at the IR rise 32.2% year-on-year to KRW18.4 billion (US$14.2 million) and hotel sales by 36.6% to KRW23.0 billion (US$17.7 million), with Adjusted EBITDA back into the black at KRW4.21 billion (US$3.2 million).
Pointing to the “growing staycation demand on five-star hotels”, Paradise Co said its 2Q sales exceeded the corresponding quarter in 2019 while ongoing demand through the early stages of Q3 continues to push up ADR.
Paradise City is expecting to see “operating profit turnaround from 3Q backed by a casino recovery caused by Japan VIPs and strong hotel revenue in high season,” it said.
Paradise operates Paradise Walker-hill in Seoul, Jeju Grand, Paradise City in Incheon and Busan Casino.
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