Kangwon Land, a South Korean casino operator, has announced impressive financial results for the year 2021, demonstrating significant revenue growth despite the challenges posed by the COVID-19 pandemic. The company’s focus on gaming and non-gaming activities has contributed to its success, with substantial increases in both revenue and gross profit.
Revenue Performance:
In 2021, Kangwon Land recorded total revenue of KRW788.4m (£49.0m/€58.0m/$66.0m), marking a remarkable 64.7% surge compared to the previous year. Gaming revenue played a major role, contributing KRW697.0m, representing a substantial increase of 72.4%. Non-gaming revenue accounted for an additional KRW91.4m.
Operating Expenses:
Operating expenses for the year amounted to KRW726.8m, indicating a 33.5% rise from the previous year. The largest expense category was casino costs, totaling KRW459.9m, followed by hotel costs at KRW135.0m. Other expenses included slot machine production costs (KRW2.8m) and subsidiary expenses (KRW22.7m), with additional miscellaneous costs totaling KRW106.5m.
Gross Profit and Net Losses:
Despite the increase in operating expenses, Kangwon Land achieved a gross profit of KRW61.6m, reflecting a remarkable 193.5% growth compared to 2020. However, when factoring in selling, general, and administrative costs amounting to KRW114.3m, the company incurred operating losses of KRW52.7m. Including additional income of KRW72.9m, other expenses of KRW34.4m, and tax expenses of KRW17.8m, net losses for the year amounted to KRW10.6m, demonstrating a significant 96.2% improvement compared to the previous year.
Fourth Quarter Performance:
In the fourth quarter of 2021, Kangwon Land continued its strong performance with revenue totaling KRW242.1m, an impressive 84.4% increase compared to the same period in 2020. Gaming revenue accounted for the majority, with KRW214.8m generated. Table games contributed KRW98.1m, slots added KRW96.1m, and membership club revenue reached KRW42.8m. High1 point bonuses to VIP customers amounted to KRW22.1m. Non-gaming revenue saw significant growth, reaching KRW27.3m, with hotel revenue (KRW17.7m), condo revenue (KRW4.7m), and ski and golf resort revenue (KRW4.3m) all contributing to the positive results.
Despite the challenges posed by the COVID-19 pandemic and temporary closures of its venues, Kangwon Land, the South Korean casino operator, reported impressive revenue growth in 2021. The company’s strong focus on gaming, coupled with its diverse non-gaming offerings, contributed to its robust financial performance. Despite operating losses and net losses in certain periods, Kangwon Land has demonstrated resilience and managed to improve its financial position compared to the previous year.