Kangwon Land, a South Korean gambling establishment operator, reported a substantial decline in earnings for the initial three months of 2021 compared to the same period in the preceding year. The enterprise reported earnings of 974.4 billion won ($869 million), representing a significant drop from the previous year.
The company’s earnings for the first quarter of 2021 were down 25.8% from the preceding quarter. The total gaming revenue (GGR) was 983 billion won, but 129 billion won was allocated to the “High1 Point” loyalty bonus fund, resulting in actual casino earnings of 854 billion won, a 57.3% decrease from the previous year.
Of the total GGR, 380 billion won originated from table games, 278 billion won from the members club, and 326 billion won from slot machines.
The number of visitors to the casino decreased by 79.9% year-over-year to 87,217, and by 28.8% from the fourth quarter of 2020. The number of foreign players decreased by 93.7% year-over-year from 5,406 to 340. Players spent a total of 417.2 billion won, a 58.8% decrease from the preceding year.
Non-gaming revenue decreased by 66.6% from 360 billion won in the initial three months of 2020 to 120 billion won. Revenue from hotel operations was 57 billion won, ski resorts 32 billion won, and condo sales 27 billion won.
The remaining non-gaming revenue originated from golf and water park operations, slot machine production, and subsidiary sales.
The company reported a significant financial shortfall of 34.5 billion won after accounting for 131.9 billion won in production costs, a stark contrast to the 78 billion won profit recorded in the initial quarter of 2020. After subtracting 25.1 billion won in operational and administrative expenses, the operating deficit reached 596.2 billion won, a substantial decline of 90.5%.
The company’s non-operational financial earnings amounted to 22.1 billion won, a year-over-year increase of 86.7%, while financial outlays decreased by 98.5% to a mere 4 billion won.
Following the deduction of 19.3 billion won in miscellaneous expenses, the company’s pre-tax earnings were a negative 557.3 billion won. Subsequently, the company received a corporate income tax benefit of 14.8 billion won, resulting in a net loss of 40.9 billion won, compared to a net loss of 156.12 billion won in the first quarter of 2020.
Attributing the substantial loss to the prolonged closure of its resorts due to the novel coronavirus (COVID-19) pandemic, the company reported a total loss of 275.86 billion won in 2020.
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