South Korea’s Kangwon Land Casino saw its net income for the fourth quarter of 2015 rise to US$75.8m, (KRW93bn) an astonishing 96.3 per cent rise compared to the same quarter last year.
However, last year, the final quarter was impacted by a one-off non-operating expense meaning that the increase in Gross Gaming Revenue was healthy but more modest at an 8.6 per cent year-on-year increase to KRW405.9bn.
Daiwa Securities’ Analyst Thomas Kwon said: “This was slightly lower than our (KRW418bn) and the Bloomberg consensus estimate of KRW408bn. Operating profit of KRW120bn was also weaker than our and the consensus forecasts due to high labour costs and a rise in the abandoned mining fund and complimentary expenses. In our view, Kangwon Land has well leveraged its improved casino-gaming service infrastructure by adding more casino tables, hiring more dealers and service staff, and replacing old slot machines.
“Importantly, even the mass segment also generated robust fourth quarter 2015 revenues with a 9.7 per cent year-on-year growth,” he added. “Kangwon Land is ready to capture the solid casino-gaming demand in Korea, while other competitor casino resorts are facing difficulties in luring gamers and increasing drop. Its casino sales would continue to grow in 2016, boosted by strong revenues from mass table games and slot machines.”
For the whole year, Kangwon Land saw GGR of KRW1.63tr, representing an increase of 9.2 per cent from 2015 with operating profit increasing by 16 per cent.
The casino is located at the foot of High1 Ski and Golf Resort in Sapuk-eup, Jeongseongun, South Korea. It is currently the only Korean casino that allows Korean nationals to play. It operates 200 tables and 1,360 slots.
In comparison to Kangwon Land’s improved performance, rival operator Grand Korea Leisure saw its fourth quarter revenue fall by 40.6 per cent.