Paradise Co 17Q1 profit plunges on VIP luck

Paradise Co reported a 92 percent plunge in net profit in 17Q1, due to a downturn in casino sales caused by unfavorable VIP luck.

The group, which operates the Busan, Walker Hill, Paradise City, Jeju Grand and Jeju Lotte establishments in South Korea, reported net profit of KRW 1.3 billion (US$1.2 million) in 17Q1, down from KRW 15.8 billion recorded in the prior-year period.

While cost of sales remained similar of the year, casino sales fell 9.7 percent from KRW 137 billion in 17Q1 to KRW 142.4 billion in 16Q1.

The company saw an operating loss of KRW 7.7 billion in the quarter, compared to an operating profit of KRW 15.3 billion in the first quarter of 2016.

Paradise City, which is developed through a joint venture of Sega Sammy, saw a 5.6 percent increase in sales in the first quarter to 2017 to KRW 22.8 billion, with an net profit of KRW 14.1 billion in the quarter.

The company said hotel and casino labor costs, as well as advertising expense increased in the lead up to the launch of Paradise City.