Casino op Paradise Co Q1 Losses From March To Reduce Virus Pain

Paradise Inc., which operates foreigner-only casinos in South Korea, cut its first-quarter losses, the Korea Exchange said Tuesday.

Those losses came to 2.46 billion won ($2 million), up 67.3 percent from 7.53 billion won in the prior-year quarter.

Sales fell 8.5% year-on-year to 184.67 billion won. Compared to the fourth quarter of 2019, sales fell 31.5%. The company posted sales of 269.45 billion won in the three months to Dec. 31.

Casino sales fell 9.7% to 78.27 billion won from 86.68 billion won a year earlier.

Towards the end of the first quarter, Paradise Co. said it would close its four casino sites for two weeks on Mar. 24 in line with South Korea's efforts to curb the further spread of the COVID-19 pandemic in South Korea. Some of its non-gaming services, such as entertainment venues, were also shut down. The company reopened its casinos on April 13 on Jeju Island. It resumed operations at the remaining three gaming venues on Apr. 20.

Earlier this month, the company said casino revenue fell 86% in April from a year earlier amid the COVID-19 turmoil.

"The impact of restrictions on overseas travel related to COVID-19" was "reflected in the casino business in the first quarter" at Paradise City Resort (pictured) near Incheon International Airport for the three months to March 31, the company said in an earnings presentation.

It also added that casino sales in Paradise City, which is venture-run with Japan's Sega Sammy Holdings, rose 36% year-on-year in January and 32.4% in February, but casino sales fell 70% in March.

The group noted that many of Paradise City's non-gaming entertainment facilities were closed from March 1 to May 1.

In a commentary, the company said cost controls in Paradise City would continue in the second quarter, with adjustment costs down 47.8% year-over-year due to the first-quarter action.

"Labor cost reductions will be further accelerated by the provision of paid leave and the use of the Korean government-run "employee retention subsidy program."

Paradise Co. not only has an interest in Paradise City but also runs three different casino complexes. They are Walkerhill in Seoul, Jeju Grand on Jeju Island, and Busan Casino in the southern port city of Busan.

When it comes to casino operations for the entire group this quarter, Japanese VIPs made the single-group contribution to the group's W1.16 trillion soft drop for the quarter: The latter refers to the amount of cash customers exchanged for chips at a table. Japanese VIPs provided about W373 billion, Chinese VIPs provided W318 billion, VIPs in other markets provided an additional W261 billion, and mass market participants imported W212 billion.

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