The South Korean gambling and resort company, Gangwon Land, experienced a substantial financial setback in 2020, reporting a loss of 275.86 billion won (equivalent to $250.2 million). This downturn was primarily attributed to the prolonged closure of its resorts, a consequence of the global COVID-19 pandemic.

The company’s revenue took a significant hit, plummeting by 68.5% year-over-year to 478.58 billion won. While expenses decreased by 26.1% year-over-year, the total cost of sales, reaching 544.5 billion won, still outweighed revenue.

Of this total cost, 294.5 billion won originated from the casino, representing a 36.2% decline, while the hotel contributed 119.3 billion won, down 17.3%. The operator also generated 55.6 billion won from apartment rentals and 3.5 billion won from its High1 ski resort.

This resulted in a gross loss of 65.9 billion won, a stark contrast to the gross profit of 783.4 billion won recorded in 2019.

After accounting for 140.7 billion won in management fees and 225 billion won allocated to the development of a new resort from a former mine, Gangwon Land’s operating loss reached 431.58 billion won. This stands in stark contrast to the profit of 501.15 billion won achieved in 2019.

The company reported 17 billion won in non-operating income and 56.6 billion won in financial income, but incurred 47.6 billion won in non-operating expenses, leading to a pre-tax loss of 404.5 billion won. After receiving 12.8 billion won, the company ultimately reported a net loss of 275.86 billion won.

Despite receiving a tax break of six billion won, Gangwon Land reported a net loss of 275.86 billion won. This signifies a decline in profit of 334.66 billion won compared to the previous year.

Examining the fourth-quarter results alone, Gangwon Land’s income was 131.3 billion won, a 64.8% reduction from the previous year. Of this, 117.2 billion won originated from casino games, a 64.7% decrease. The remaining 14.1 billion won came from other business segments, a 65.7% decrease.

The casino income of 117.2 billion won is after deducting bonus funds of 9.2 billion won from slot machine revenue of 48 billion won, general table game revenue of 45.8 billion won, and VIP room revenue of 32.6 billion won.

A total of 122,532 gamblers wagered 528.6 billion won at the Gangwon Land casino in the fourth quarter. This signifies a decrease from 696,121 gamblers in the fourth quarter of 2019. International customer influx has also decreased from 8,124 in 2019 to 566, remaining at a low level.

Of the 14.1 billion won in non-casino income, hotel revenue was the most substantial at 9 billion won. Condo revenue was 2.3 billion won, golf revenue was 1.5 billion won, and ski resort revenue was 1.1 billion won.

However, the cost of goods sold decreased by 35.2% to 153.2 billion won. This cost encompasses salaries of 67.7 billion won (25.7% decrease), tourism promotion fund of 12.6 billion won, and sales tax of 6.6 billion won.

This resulted in a gross loss of 21.8 billion won. Excluding administrative expenses, Gangwon Land’s operating loss was 76.1 billion won.

Gangwon Land recorded financial income of 19.6 billion won and non-operating income of 8.7 billion won, but incurred non-operating expenses of 8.8 billion won, resulting in a pre-tax loss of 56.6 billion won. Gangwon Land’s net loss was 2.3 billion won.

A tax reduction of 3 billion South Korean won was provided, resulting in a total of 33.3 billion South Korean won.

The operator’s primary gaming establishment in Jeongseon initially shut down on February 23rd. It resumed operations in July but closed again less than two months later. The closure, initially intended for a two-day period, extended for nearly two months.

It shut down once more on December 8th.

Image: Laser Paradise / CC BY-SA

Sign up for the iGaming News newsletter.