[Click eStock] "Lotte Gwangwang Gaebal, Benefiting from Delayed Reopening... Significant Improvement in Q4 Earnings"

[Asia Economy Reporter Jang Hyowon] IBK Investment & Securities analyzed on the 14th that Lotte Tour Development is expected to see a significant improvement in performance in the 4th quarter, benefiting from the delayed reopening.

Lotte Tour Development recorded consolidated sales of 48.2 billion KRW and an operating loss of 27 billion KRW in the third quarter of this year, representing a 60.6% increase in sales and a reduction in losses compared to the same period last year.

Lee Hwanwook, a researcher at IBK Investment & Securities, stated in a report on the day, “Despite the slow performance improvement in the casino sector, the solid performance of the hotel business led to improved results compared to the same period last year,” adding, “However, the recovery of international flights at Jeju Airport was delayed, causing the results to fall short of market consensus.”

By business segment, hotel sales amounted to 31.6 billion KRW, up 62.8% from the same period last year. However, despite the peak season, the results were somewhat disappointing compared to the previous quarter due to the resurgence of COVID-19 and other factors. The hotel OCC (occupancy rate) was 50%, down 1 percentage point from the previous quarter, while ADR (average daily rate) increased by 12.4% to 318,234 KRW.

Casino sales were 10.5 billion KRW, up 29% year-on-year but down 13.9% quarter-on-quarter. The delayed recovery of international flights at Jeju Airport limited the improvement in visitor numbers compared to competitors, and the drop in drop amount due to a decrease in VIP customers had a significant impact.

Researcher Lee Hwanwook said, “The disappointing direct flights to Jeju in the third quarter are expected to improve significantly in the fourth quarter,” and analyzed, “Direct flight routes will be greatly expanded, including Osaka in November, Fukuoka and Tokyo in December, as well as Taiwan and Hong Kong, accelerating inbound inflow and leading to a steep performance improvement.”

He added, “In particular, a total of 12 charter flights will be operated to three countries?Japan, Malaysia, and Hong Kong?to overcome the shortage of direct flight routes and expand casino VIP customer attraction activities.”