New Silkroad expects huge losses at Jeju casino

The firm that operates the MegaLuck casino at Jeju’s KAL Hotel reports it will more than its double losses in the first half of the year.

South Korea.- The Hong Kong-based gaming and properties company, New Silkroad Culturaltainment Limited, has issued a profits warning saying losses for the first half of the year will double those from the same period in 2019, mostly due to the performance of gaming operations.

In a filing to the Stock Exchange of Hong Kong, the firm informed shareholders that a preliminary review of unaudited financial performance for the first six months of the year showed net losses of more than HK$47 million (over US$6 million).

The figure more than doubles losses in the first half of 2019, which ran at approximately HK$23 million (US$2.9 million).

New Silkroad attributed the results to the significant drop in revenue from the group’s business on Jeju island due to the Covid-19 pandemic and imposition of travel restrictions resulting in a sharp reduction of tourists.

The firm operates MegaLuck casino at Jeju’s KAL Hotel and is developing the Glorious Hill integrated resort on the same island in South Korea.

The company said: “In response to the adverse business environment as a result of the outbreak of the novel coronavirus pandemic, the Group has implemented cost reduction measures to counteract the current situation and will closely monitor the market development for prompt response”.

Part of the losses also derived from the group’s wine business “due to slack market momentum.”

Audited results for the group will be published by the end of August. Other casinos in South Korea are also expecting substantial losses.