Kangwon Land Posts Significant Loss in Q1 2021

Kangwon Land’s financial performance for the initial three months of 2021 has experienced another decline. The South Korean gambling and resort operator publicized its first-quarter financial report, revealing total earnings of 97.44 billion won ($86.9 million/€71.5 million/£61.5 million), representing a 58.7% reduction compared to the same period in the previous year.

Kangwon Land’s earnings continued to fall during the first quarter of 2021. The revenue decrease was 25.8% compared to the preceding quarter. Overall gaming revenue (GGR) reached 98.3 billion won, but 12.9 billion won of this amount originated from the ‘High1 Point’ loyalty bonus fund, resulting in actual casino revenue of 85.4 billion won, a 57.3% decrease from the same period in the previous year.

Of the total GGR, 38 billion won was generated from table games, 27.8 billion won from the operator’s membership club, and 32.6 billion won from slot machines.

During this period, the operator welcomed a total of 87,217 guests, representing a 79.9% decrease compared to the same period in the previous year and a 28.8% decrease from the number of guests in the final 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.

Non-gaming revenue amounted to 12 billion won, a 66.6% decrease from 36 billion won in the first quarter of 2020. Of this amount, the operator’s hotel operations generated the highest revenue at 5.7 billion won, followed by the ski resort at 3.2 billion won and condo sales at 2.7 billion won.

The operator’s golf and water park operations, slot machine manufacturing, and subsidiary sales accounted for the remaining non-gaming revenue during this period.

The company announced a substantial operating deficit of 34.5 billion won following a cost of goods sold that reached 131.9 billion won, a decrease from the gross profit of 78 billion won in the initial quarter of 2020. Sales, administrative, and general costs were 25.1 billion won, a reduction of 90.5%, leading to an operating loss of 596.2 billion won.

The company’s non-operating financial income was 22.1 billion won, an increase of 86.7% year-over-year, while financial costs decreased by 98.5% to just 4 billion won.

After subtracting other expenses of 19.3 billion won, the company’s pre-tax loss was 557.3 billion won. It then received a corporate income tax benefit of 14.8 billion won, resulting in a net loss of 409 billion won, compared to a net loss of 1,561.2 billion won in the first quarter of 2020.

The company recorded a total loss of 2,758.6 billion won in 2020 due to repeated extensions of the closure of its resorts due to the novel coronavirus (COVID-19) pandemic.

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