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1Q26 Earnings(Consolidated) |
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Greetings from Kangwon Land!
Before we begin, please note that these figures are preliminary and prepared for your convenience prior to the external audit. Some details might change during the process, and since this includes forward-looking statements, the actual results could differ from our current outlook. Now, let me walk you through our consolidated results for the first quarter of 2026. In the first quarter, our revenue reached 378.9wbn, which is a 3.4% increase YoY. However, as operating expenses rose by 6.2%, operating profit declined by 7.2%, coming in at 68.9wbn. Net income decreased by 46.8%, reaching 39.7wbn, due to both a decrease in operating profit and a decrease in non-operating income, such as our financial gains. For the margins, we recorded an operating margin of 18.2% and a net margin of 10.5%. Looking at our revenue in more detail, let's start with the casino segment. Our gross gaming revenue(GGR) grew 4.5% YoY to 360.0wbn. While the mass GGR saw a slight increase of 0.3%, VIP GGR grew by 27.6%. This strong VIP performance was mainly driven by the higher betting limits for Baccarat tables we introduced in May, 2025, along with our ongoing service and system improvements. As for the gross gaming revenue which we calculate by subtracting complimentary points(High1 Point) and adding F&B revenue, it reached 330.4wbn, up 4.3% YoY. Moving on to the non-gaming segment, which includes our hotels, condos, ski, golf, and water world facilities. Revenue totaled 48.6wbn, down 1.8% YoY. This was primarily due to a 1.1wbn decline in ski-related revenue. Operating expenses totaled 310.0wbn, up 6.2% year-over-year. There are three main reasons for this increase. First, Abandoned Mine Development fund and Tourism fund and consumption tax totaled 97.1wbn, up 4.7%. Since these are tied to GGR, they increased as our revenue increase. Second, labor costs reached 93.2wbn, a 3.7% increase, which includes 2.4wbn in voluntary retirement payments. Lastly, depreciation rose by 15.7% to 22.2wbn. Regarding non-operating profit recorded a loss of 15.0wbn this quarter. Financial income dropped 81.9%(19.1wbn) to 4.2wbn because of the extreme market volatility in March following the Middle East conflict, which affected the valuation of our bonds. The good news is that we’ve already seen a significant recovery in these losses in April. Also, donation expenses reached 18.3wbn because we decided to front-load some of the donations originally planned for the second quarter into the first quarter. We’ve allocated a total investment budget of 145.4wbn for 2026 to ensure our sustainable growth. So far, we’ve executed 44.4wbn in the first quarter. That concludes our 1Q26 result update. We will continue to focus all our efforts on driving revenue growth, managing our costs efficiently, and improving our overall profitability. If you have any further questions, please don't hesitate to contact the IR at +82-33-529-3204 or 3209. Thank you very much. |
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