Hong Kong-listed gaming and entertainment investor New Silkroad Culturaltainment Ltd has issued a profit warning on an expected loss of HK$47 million for the six months to 30 June 2020, widened from a loss of HK$23 million over the same period in 2019.
In a filing, New Silkroad said the increase in net loss was mainly due to a “significant drop in revenue from the Group’s entertainment business in Jeju, Korea … brought by the outbreak of the novel coronavirus pandemic since January this year and the imposition of local travel and entry restrictions by the Korea government, thereby resulting in a sharp reduction of tourists to Jeju, Korea.”
It also noted a decrease in profit margin on its winery business.
New Silkroad operates MegaLuck casino at Jeju’s KAL Hotel and is planning to develop an integrated resort nearby described as “one of the largest integrated resort complexes in South Korea.”
The project is set to include a casino, numerous five-star hotels, commercial and residential properties, healthcare facilities, a theme park and golf courses.
MegaLuck Casino saw its revenue fall 20.2% to HK$82.6 million in 2019, representing 39.1% of group-wide revenue compared with a 45.5% contribution in 2018.