South Korean gaming operator Shin Hwa World Limited has released its financial results for the year ending December 31, 2023, revealing a substantial decrease in consolidated revenue.
The company’s consolidated revenue for the year amounted to approximately HK$1 billion (US$128.8 million), reflecting a notable 25.3 percent decrease compared to the previous year’s figure of approximately HK$1.3 billion ($166.1 million).
Shin Hwa World operates Jeju Shinhwa World, an integrated resort located on Jeju Island, South Korea, that includes the foreigners-only Landing Casino.
The casino holds 150 gaming tables, 210 slot machines and electronic table games, occupying an exclusive gaming area of approximately 5,500 square meters.
The company’s non-gaming revenue for the year was approximately HK$989.5 million ($127.5 million), down from approximately HK$1.3 billion ($166.1 million) in 2022, while gaming revenue remained relatively stable at approximately HK$46.7 million ($6.0 million) compared to approximately HK$46.1 million ($5.9 million) in the previous year.
However, despite efforts to mitigate losses, the company reported an increased loss attributable to the owners. The loss for the year amounted to approximately HK$522.4 million ($67.4 million), up from approximately HK$216.9 million ($27.9 million) in 2022.
The company’s revenue generated from sales of residential properties and property management amounted to approximately HK$201.9 million ($26.0 million), a reduction of more than a third from the previous year.
The company attributed the increase in consolidated net loss to various factors, including intense competition impacting room pricing and occupancy rates, reduced residential property sales due to market downturn and interest rate rise, increased marketing and operating expenses driven by inflation, particularly in utility costs and facilities maintenance costs, as well as higher employee benefit expenses.
Additionally, the absence of certain income from the reversal of trade and other receivables impairment recorded in the previous financial year further impacted the results.
‘The rise in interest rate has dampened the rebound of global economy, and the markets expect interest rate cuts in 2024. However, it is believed that interest rates will remain high for some time, and the forthcoming years will remain challenging for the Group,’ the company pointed out in its financial report.
‘Taking these macro factors into consideration, the Group will remain cautious in capital commitments and will act prudently in future development and investment plans in order to maintain a healthy liquidity position.
During the Year, Shin Hwa made continued progress in the maintenance, renovation, and upgrading of facilities in Jeju Shinhwa World.
A new premium cinema in our resort equipped with top-of-the-range surround sound system and premium seating facilities. The company also appraised the feasibility of a further residential development in zone R of Jeju Shinhwa World.
‘The Group expects that the new residential development may better utilise the use of land in Jeju Shinhwa World, thereby broadening the income stream of the Group in the long run. Furthermore, the Group will continue to evaluate its funding needs and financial position periodically and will explore fund raising and financing facilities if and when opportunities arise,’ Shin Hwa noted.
