South Korean gaming operator Shin Hwa World has experienced a 27 percent decrease in gaming revenue during 1H23, dropping from HK$32.6 million ($4.2 million) in 1H22 to HK$23.8 million ($3 million).
All of the gaming revenue was generated from one of South Korea’s largest foreigners-only casinos, Landing Casino. According to the company’s interim financial results, the segment loss from the Gaming Business expanded to HK$107.8 million ($13.9 million).
Landing Casino is an integral part of Jeju Shinhwa World, featuring 150 gaming tables, 210 slot machines, and electronic table games, occupying an exclusive gaming area of approximately 5,500 square meters.
The group notes that “the recovery momentum of the gaming business became apparent, with both the rolling volume and non-rolling volume increasing compared to the corresponding period in 2022. However, the decline in the winning percentage resulted in a negative effect on the segment revenue.”
Shin Hwa World’s consolidated revenue fell by 39.5 percent in 1H23 to HK$418 million ($53.3 million), with net losses expanding to HK$339 million ($43.2 million).
The increase in consolidated net loss for the period was mainly attributed to “the pressure on room prices and occupancy rates due to intense competition and domestic customers traveling abroad after the easing of travel restrictions, leading to a decrease in revenue generated from the Integrated Resort Development segment”; “the increase in operating expenses resulting from inflation, particularly utility costs and spending on facility maintenance, as well as an increase in employee benefit expenses”; and “the absence of a net amount of approximately HK$66 million ($8.4 million) from the reversal of trade and other receivables impairment in the corresponding period of 2022.”
Regarding future development, management notes that China has recently lifted pandemic-era restrictions on group tours to South Korea, potentially benefiting their tourism industry.
“While room prices and occupancy rates were under pressure during the period, the Board believes that the reopening of borders will boost the tourism industry and have a positive effect on our business.”
Jeju is one of the travel destinations that does not require a visa for Chinese tourists.
Shin Hwa World has given up on seeking further extensions for the provision of a remedy to the Philippine Amusement and Gaming Corporation (PAGCOR) to satisfy the requirements of the Provisional License for developing an integrated resort in the Philippines.
“Despite the lapse of the Provisional License, the Group will allocate its resources and remain focused on its business in Jeju Shinhwa World, South Korea,” the company notes.
Executive director resigns
On the same day, the Hong Kong-listed company also disclosed that the company’s executive director, Pu Shen Chen, will resign due to personal pursuits, effective from September 1st.
In early June, the company’s Chairman of the Board, Dr. Yang Zhihui, announced his retirement from the position and from his Executive Director role. Yang Zhihui had been suspended from his functions in November 2022 due to legal proceedings brought by Hong Kong’s Securities and Futures Commission (SFC).