Kangwon Land (035250) Q2 2024 earnings summary

Executive summary

• Q2 consolidated revenue was ₩338.0bn versus ₩331.1bn YoY; operating income was ₩73.9bn versus ₩82.0bn, and net income was ₩161.0bn versus ₩91.5bn.

• H1 consolidated revenue rose to ₩706.3bn from ₩689.2bn; operating income was ₩149.7bn versus ₩151.7bn, while net income increased to ₩253.8bn from ₩193.0bn.

• On a tentative K-IFRS separate basis, Q2 sales rose 2.1% YoY to ₩337.7bn, operating profit fell 10.4% to ₩73.4bn, and net profit increased 64.2% to ₩149.8bn.

• Casino operations generated 86.35% of H1 segment revenue; resort activities include hotels, condos, skiing, golf and the water park.

Financial highlights

• H1 net income included ₩75.4bn of VAT refunds recorded in other income; other income totaled ₩77.9bn.

• Q2 separate-basis net profit growth included ₩74.1bn in other profit, largely from a VAT refund and interest received after winning a lawsuit.

• H1 consolidated operating cash flow was ₩59.4bn versus ₩36.9bn YoY; June-end cash and cash equivalents were ₩149.6bn, down from ₩166.2bn at year-end 2023.

• Q2 separate-basis gross profit was ₩103.0bn, down 4.1% YoY; SG&A increased 16.4% to ₩29.6bn.

Segment performance

• Q2 gaming sales grew 3.8% YoY to ₩305.4bn; non-gaming sales declined 11.5% to ₩32.3bn, or 9.6% of total sales.

• Q2 gross gaming revenue rose 3.4% YoY to ₩331.1bn; casino drop fell 5.1% to ₩1,347.0bn and visitors declined 5.2% to 546,187.

• H1 casino revenue reached ₩621.7bn, up from ₩600.4bn YoY; hotel revenue was ₩47.9bn versus ₩51.8bn, and condo revenue was ₩16.5bn versus ₩16.2bn.

• Q2 hotel sales declined 9.8% YoY to ₩22.0bn; condo sales fell 13.2% to ₩4.4bn and ski sales fell 6.4% to ₩0.9bn.