South Korea Casino Owner Halts Philippines Expansion Plans
LISTEN TO THIS ARTICLE:Shin Hwa World Ltd, a casino developer listed on the Hong Kong stock exchange, announced that it no longer wants an extended deadline to locate appropriate land for its casino project in the Philippines. Finding the property was a mandatory step for the company to fulfill the conditions set by the temporary casino license awarded to the company by the Philippine Amusement and Gaming Corp (PAGCOR) years ago.
Re-evaluating the Future
Shin Hwa World Ltd, previously referred to as Landing International Development Ltd, was ready to expand into the Philippines in July 2018. An announcement by the company at the time stated that a wholly-owned subsidiary had obtained a provisional gaming license from PAGCOR and had chosen a location. However, in September of the same year, the administration led by then-President Rodrigo Duterte terminated the lease agreement for the Manila site intended for the casino's operations.
Shin Hwa World Ltd, as stated in its annual report for 2022 filed this past March, has initiated a search for an alternative location within the country. The company, which had conveyed its ongoing efforts to diligently examine potential options and engage in productive deliberations with PAGCOR, received an extension of the terms of its provisional license to do so.
In its latest update, in a filing from last Friday, the company stated that it had not yet found a suitable alternative location. As a result, it’s calling off the search and is going to re-evaluate its plans for the Philippines.
That doesn’t mean that it couldn’t revisit the potential for expansion into the country at a later date. It expressed its openness to considering and deliberating on any project in the Philippines at some undetermined point in the future, irrespective of its magnitude or type.
South Korea Retains Focus
Shin Hwa World operates an integrated resort (IR) by the same name on the South Korean island of Jeju. It’s open only to foreigners and is one of about 18 such casinos in the country.
Last month, the company announced that it was going to spend about $760 million to upgrade the property, adding new condominiums and shopping malls. This, coupled with slow overall growth, could be the reason for the decision to halt expansion plans in the Philippines.
The IR’s casino opened in 2018 and has had difficulty finding solid footing since then. It suffered almost immediately because of COVID-19, as well as friction between South Korea and China.
Finally, in 2022, the Shin Hwa World began to rebound. In a filing this past March, the company reported a loss attributable to shareholders of roughly $27.6 million for 2022, which was a huge improvement on the $135.46 million loss it reported in 2021.
Of last year’s results, the IR provided a significant boost to the bottom line. Its revenue was $120.92 million, almost $11 million more than a year earlier.
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