Hong Kong-listed Korean integrated resort operator Shin Hwa World Ltd has issued a profit warning on an expected net loss for the six months to 30 June 2023 of between HK$310 million and HK$370 million (US$40 million and US$47 million).
Ahead of publication of the company’s interim results later this month, Shin Hwa World – which owns and operates Jeju Shinhwa World on Jeju island – said the consolidated net loss was expanded from a loss of HK$105 million (US$13.5 million) in 1H22, citing multiple reasons.
These include pressure on the room price and occupancy rate of hotels due to intense competition and domestic customers travelling abroad after the easing of travel restrictions, leading to a decrease in revenue generated from the integrated resort development segment, a decrease in residential property sales owing to the downturn in the property market and an increasing interest rate, and an increase in operating expenses resulting from inflation, particularly utility costs, spending on facilities maintenance and an increase in employee benefit expenses.
It also cited a decrease in fair value gain of investment properties, the absence of a net amount of HK$66 million from the reversal of trade and other receivables impairment in the corresponding period of 2022, and the possible impact on the recognition of impairment on intangible assets.
There was no mention in the profit warning of how the IR’s gaming business has performed during the first half of the year.
Opened in 2017, Jeju Shinhwa World incorporates four luxury hotels with a combined 2,000 rooms, Landing Casino covering 5,500 square meters of gaming space, a number of theme parks and almost 12,200 square meters of MICE space.
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