South Korean gaming operator Shin Hwa World has issued a profit warning for 2023, with the company expecting a loss of between HK$450 million ($57.5 million) and HK$540 million ($69 million).
According to a Friday filing, the loss is a considerable expansion from the HK$217 million ($27.7 million) downturn it saw in 2022.
Shin Hwa World controls Jeju Shinhwa World, a resort with a foreigner-only casino on the South Korean holiday island of Jeju.
The group notes that the expected increase in loss was mostly attributable to ‘the pressure on the room price and occupancy rate due to intense competition and domestic customers traveling abroad after the easing of travel restrictions’. This led to less revenue from the integrated resort segment.
The group also notes a drop in residential property sales ‘owing to the downturn in the property market and the interest rate rise’.
The group was further hit with an increase in operating expenses – mostly utility costs and maintenance, as well as employee benefit expenses – all impacted by inflation.
The group is also further facing a possible impairment on intangible assets.
The profit warning comes ahead of the group’s annual results announcement, ‘expected to be published in late March’.
Shin Hwa had previously warned that it was anticipating its losses to expand in the second half of 2024, after seeing 1H23 gaming revenue drop by 27 percent, to HK$23.8 million ($3 million).
Net losses during the 1H23 period totaled HK$339 million ($43.2 million).
