Kangwon Land is expected to receive a sluggish report card in the third quarter of this year. This is because the effect of the peak season is expected to be low due to long-term rain and increased overseas travel.
According to the industry on the 6th, Kangwon Land will announce its third-quarter earnings on the 9th. The financial and securities industry estimated Kangwon Land's third-quarter operating profit at 94.5 billion won, down 20.36 percent from a year earlier. Sales in the third quarter of this year are expected to fall 5.57% year-on-year to 375.4 billion won.
Although it is out of the red swamp after the novel coronavirus infection (COVID-19), it is expected to be a third-quarter report card with no peak season effect as VIP (excellent customers) performance is lower than expected.
Specifically, Kiwoom Securities predicted
sales to fall 9.3% year-on-year to 311.5 billion won, and non-casino sales to increase 0.2% year-on-year to 54.2 billion won. Although the water park has improved due to the seasonal impact, it is evaluated that the improvement in areas that reflect the overall decrease in guests, such as accommodation and golf, was relatively low.
In particular, the number of casino visitors in the third quarter was estimated to be 635,000, down 2.9% from the same period last year. At the same time, the drop amount (game chip exchange amount) is expected to be 1.5325 trillion won, down 8.3% from the same period last year. It is predicted that the drop per person will also decrease by 5% compared to the previous quarter, as it does not show any effect during the peak season.
The reason for the decline in visitor performance is estimated to have not properly enjoyed the peak season effect due to rain that lasted for a month in July.
The VIP rebound is pointed out as a homework to be solved.
visitors and per capita drops are down 17% from 2019, but they are gradually recovering. However, VIP performance has not escaped from a 54% decline compared to 2019.
Lee Nam-soo, a researcher at Kiwoom Securities, said, "VIP performance seems to have decreased significantly due to illegal Sado Park and increased overseas travel," adding, "It is time for a VIP rebound to grow performance."
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