Kangwon Land to improve operating profits in Q3, analysts say

JP Morgan Securities predict Kangwon Land will improve its operating profits in the next three months unless the social distancing gets tighter.

South Korea.- The South Korean casino Kangwon Land could start to see an improvement in the next quarter provided there isn’t a new uptick of Covid-19 cases.

 JP Morgan Securities noted that the second quarter of the year was the first period since the onset of the Covid-19 pandemic in which the casino operator could remain open throughout the whole three months, despite capacity limits.

Analysts said: “Third-quarter mass/slot revenues should be 20 per cent above second quarter’s, while we project more than KRW25bn (US$21.7m) in operating profits in the third quarter of 2021.”

Kangwon Land has reduced its capacity again to 30 per cent of pre-pandemic levels due to an increase in Covid-19 cases in South Korea. For the first half of the year, the casino operator registers a cumulative net loss of over KRW19bn. Second-quarter sales were KRW203.6bn, up 488 per cent when compared to the second quarter of 2020.

The company reported a net profit of KRW20.9bn (US$18.2m) for the second quarter of the year. However, its cumulative net loss for the first half amounts to over KRW19bn.

According to analysts, the social distancing measures will be lifted by 2022 leading the casino operator to achieve full recovery by next year, “probably in the back half.”