Kangwon Land Inc slips to 3Q loss on dip in non-operating income

Kangwon Land Inc, operator of South Korea’s only resort with a casino permitted to serve locals, slipped to a KRW3.63-billion (US$2.7-million) net loss in the third quarter, compared to a KRW113.07-billion profit in the prior-year period. The firm said in commentary issued on Friday that the result was due mainly to the fact non-operating income for the three months to September 30 “declined significantly due to fair-value losses on financial assets following a sharp rise in bond yields”. The company recorded a net non-operating loss of circa KRW55.9 billion, representing a 177.6 percent year-on-year decline, mainly related to the bond yields. “While these bonds are expected to provide principal protection and interest income if held to maturity, fair value losses were recognised in net income for the third quarter,” noted the company. Third-quarter operating income was KRW59.67 billion, down 17.9 percent year-on-year. Quarterly group-wide sales were KRW369.45 billion, a decline of 3.8 percent from the prior-year period. Kangwon Land Inc said casino visitor volume went down 3.2 percent year-on-year in the third quarter, to 640,039 visitors, “leading to” a 2.5 percent decrease in gross gaming revenue (GGR) to KRW359.4 billion. The company stated: “In the mass gaming segment, including foreign visitors, GGR declined 4.8 percent to KRW294.9 billion, driven by a 3.4 percent decrease in visitation and a 6.5 percent decline in drop.” It gave the detailed performance figures in Korean won, to one decimal point, in its earnings presentation. The firm said that “in contrast”, the VIP segment recorded a 9.6 percent increase in GGR to KRW64.5 billion, “supported by an 11.1 percent increase in visitation and a 5.2 percent rise in drop.” Kangwon Land Inc stated that consequently, net gaming revenue recognised in the income statement – which reflects ‘High1 Point’ – i.e. complimentary points –deductions, and includes casino food and beverage sales, declined 1.8 percent year-on-year to KRW327.8 billion. Third-quarter non-gaming revenue declined 17.4 percent year-on-year, to KRW41.7 billion. The primary reason was a “drop in hotel/condominium room revenue and water park revenue caused by ongoing room renovations. Since March, the company has been renovating a total of 757 rooms: 477 rooms in the Grand Hotel Main Tower and 280 rooms in the Mountain Condominium. Renovations are scheduled to be completed by fourth-quarter 2027 for the condominium, and first-quarter 2028 for the hotel, per Friday’s update. To support “sustainable revenue growth and long-term development”, the company allocated a total investment budget of KRW145.4 billion for 2026, with cumulative spending reaching KRW110.1 billion as of the third quarter. It said key ongoing projects included: guest room renovations, VIP gaming area remodelling, and construction of the second casino. Under the 2024-2026 shareholder return policy, the company targets a dividend payout ratio of at least 50 percent and total shareholder return ratio –= inclusive of dividends and buybacks – of 60 percent, said the update. “As part of this commitment, we plan to repurchase KRW20 billion worth of treasury shares by the end of this year, with its specific timing to be disclosed immediately upon the board approval,” the company added.