South Korea’s Shin Hwa World has reported a significant reduction in its financial losses for the first half of 2024, driven by substantial improvements in its gaming business and decreased costs across several key areas. The company, which operates the expansive Jeju Shinhwa World integrated resort on Jeju Island, posted a loss attributable to the owners of the parent of HK$231.5 million (US$29.7 million) for the six months ending 30 June 2024. This marks a notable improvement from a HK$394.3 million (US$50.5 million) loss in the same period a year earlier.
Key Financial Improvements
Shin Hwa World’s narrowed losses are attributed to several factors, including a sharp increase in gaming revenue and reduced amortization, depreciation, and finance costs. The company’s total revenue for the period grew by 25.5% year-on-year to HK$524.7 million (US$67.3 million), largely driven by a remarkable 380% increase in net gaming revenues, which rose to HK$114.9 million (US$14.7 million).
The strong performance in the gaming sector comes despite a segment loss of HK$55.8 million (US$7.2 million), which, while still negative, represents a significant improvement from a loss of HK$107.8 million (US$13.8 million) in the corresponding period in 2023. The improvement in gaming was credited to growing visitation and increased rolling and non-rolling volumes at Landing Casino, which boasts 150 gaming tables and 210 slot machines and electronic table games.
Diverse Revenue Streams
In addition to its gaming operations, Shin Hwa World benefits from a diverse array of revenue streams, all centered around its flagship property, Jeju Shinhwa World. This integrated resort development offers a wide range of facilities, including hotels, a convention and exhibition center, a retail mall, various food and beverage outlets, a leisure and entertainment complex, a theme park, a water park, and one of Jeju’s largest foreigners-only casinos.
The Property Development segment, which involves the sales of resort condominiums and villas within Jeju Shinhwa World, also showed considerable growth. Revenue from property sales exceeded HK$70 million (US$9.0 million) in the first half of 2024, leading to a segment profit of HK$30.9 million (US$4.0 million). This represents a 92% increase year-on-year, reflecting strong demand for resort properties in Jeju.
However, not all segments saw growth. The Integrated Resort or non-gaming segment, which includes various non-casino-related amenities and services, experienced a slight decline in revenues to HK$339.3 million (US$43.5 million). This segment also recorded a loss of HK$115.4 million (US$14.8 million), highlighting ongoing challenges in non-gaming operations.
Strategic Focus and Future Outlook
Shin Hwa World remains focused on expanding its customer base and enhancing its offerings, despite facing increasing competition from newly built hotels and other attractions on Jeju Island. The company acknowledges the challenges posed by local and regional competition but is optimistic about future growth opportunities, especially if the number of scheduled flights and routes to Jeju increases, which could significantly boost visitation and business performance.
To sustain its growth momentum, Shin Hwa World is committed to continuous improvement of its facilities and services. During the first half of 2024, the company made significant progress in maintaining, renovating, and upgrading the facilities at Jeju Shinhwa World. These efforts are aimed at enhancing the overall guest experience and attracting more visitors, particularly in the competitive gaming sector.
Moreover, the company plans to organize gaming tournaments and offer exclusive entertainment and complimentary services for VIP casino patrons. By focusing on its core business of integrated resort development and leveraging its wide range of amenities and attractions, Shin Hwa World aims to differentiate itself from competitors and strengthen its market position.
Shin Hwa World’s performance in the first half of 2024 reflects a mixed but generally positive outlook, with strong gains in gaming revenue and property sales offsetting some of the losses in the non-gaming segment. The company’s strategic focus on enhancing its offerings and expanding its customer base suggests a clear path forward, albeit one that will require careful navigation in the face of ongoing market challenges.
As the company continues to invest in its facilities and explore new opportunities for growth, it remains well-positioned to capitalize on the increasing popularity of Jeju Island as a tourist destination. With a comprehensive range of attractions and a focus on providing a high-quality guest experience, Shin Hwa World is poised to make further strides in improving its financial performance in the years ahead.