Analysts at JP Morgan predict South Korea’s foreigner-only casino could return to pre-pandemic revenues by 2023.
South Korea.- A day after Kangwon Land shared its financial results for the third quarter of the year, J.P. Morgan has predicted that government’s decision to “live with Covid-19” could help the casino operator revenues return to pre-pandemic levels by 2023.
The casino operator has recently been authorised to ease capacity restrictions to allow 2,300 customers at any one time, up from 1,800.
Analysts said: “Strong pent-up demand and expanded operating hours/capacity allow us to stay hopeful on a full recovery by some point in late 2022,” while they also highlighted Kangwon Land Inc’s profits could return to pre-pandemic levels in 2023.
Authorities allowed the casino to resume operations from November 1. Entry is permitted only to those who have been fully vaccinated against Covid-19 and can show a vaccine pass or to customers who can show a negative Covid-19 test issued within 48 hours before their visit.
The South Korean casino reported net profit for the third quarter of the year declined 2.4 per cent quarter-on-quarter to KRW20.42bn (US$17.3m). GGR for the quarter was up 15.8 per cent from KRW203.8bn to KRW235.90bn, which was also a rise of 272.4 per cent when compared to Q3 2020.
Meanwhile, JP Morgan said that Paradise Co‘s recovery may take longer, sometime towards the end of Fiscal Year 2023 as long as the country continues easing travel restrictions.
For the third quarter, the company registered EBITDA of nearly KRW29.65bn, compared to negative EBITDA of KRW5.23bn in the previous year. The company posted a net loss of KRW10.58bn for the quarter of the year, which was narrowed from a net loss of KRW31.99bn in Q3 2020.
Casino sales were up 12.1 per cent year-on-year and 47 per cent sequentially to KRW44.96bn. Paradise City’s venue at Incheon registered casino sales of KRW31.12bn, up 123.4 quarter-on-quarter and up 105.7 per cent when compared to Q3 2020.