Hotel Shilla (008770) Q2 2024 earnings summary

Executive summary

• Revenue grew 15.7% year-over-year to 1,002.7bn KRW in 2Q 2024, with operating profit down 58.9% to 27.6bn KRW.

• Operates two main segments: Travel Retail (TR) and Hotel & Leisure, with global expansion in both areas.

• TR segment is a top 3 global duty-free operator, with significant presence in Korea and overseas airports.

• Hotel & Leisure segment includes luxury hotels, resorts, and business hotels, with recent openings and international expansion.

• Travel Retail segment led revenue growth but saw a sharp decline in operating profit.

Financial highlights

• Consolidated revenue: 1,002.7bn KRW (+15.7% YoY, +2.2% QoQ) for 2Q 2024; H1 2024 revenue: ₩1,983.5 billion, down from ₩3,568.5 billion in H1 2023.

• Operating profit: 27.6bn KRW (-58.9% YoY, +128.1% QoQ) for 2Q 2024; H1 2024 operating income: ₩39.8 billion, down from ₩91.2 billion YoY.

• Net income attributable to controlling interest: ₩25.8 billion, down from ₩85.9 billion YoY.

• EBITDA margin for 2Q 2024 was 6.0%.

• Total assets: ₩3,145.2 billion; total equity: ₩638.3 billion as of June 30, 2024.

Outlook and guidance

• Travel Retail to focus on profitability recovery amid changing market conditions.

• Hotel & Leisure aims to maintain strong performance by flexibly responding to customer demand.

• Focus on strengthening global competitiveness in both TR and hotel businesses.

• Continued digital transformation and expansion of online duty-free channels.

• Ongoing diversification into lifestyle and leisure businesses.