Background to the company
Landing International Development Limited, which is listed on the Hong Kong Stock Exchange, is a developer and operator of numerous resorts around the globe.
Its offerings include luxurious hotels, casinos, catering, retail attractions, theme parks, and convention centers. The company’s flagship resort on Jeju Island in South Korea opened on March 22, 2018.
Significant losses in 2018
Figures reported by the company for 2018 show a loss of $89.4m (£68.7m), compared to a profit of around $64m (£49m) in 2017, even though total revenue increased significantly, from $107m (£82.2m) to $270m (£207.4m).
Most of the increase came from the company’s Jeju Shinhwa World facility in South Korea. Its revenue rose from $23m (£17.7m) in 2017 to $190m (£146m) in 2018.
This casino, on Jeju Island, is open only to people who are not from South Korea. This is because the country wants to attract tourists to the region but does not particularly want local residents gambling. Gambling addiction has been increasing in South Korea and all across Asia.
The company blames its disappointing results on a number of factors. One is the loss of $84m (£64.5m) in profits from shutting down a lighting business in China; another is its divestiture from the United Kingdom.
In September 2017, the company confirmed the sale of its Les Ambassadors Club and Casino in London. This was an upmarket venue that was popular for many years.
Difficult circumstances
There was uncertainty about the status of the company’s chairman during the latter months of 2018. The chairman is a Chinese businessman, Yang Zhihui. Near the end of August, company officials revealed that they were not able to get in touch with him.
A company filing at the end of November confirmed that the chairman was back at work. According to Landing, the chairman was “assisting a relevant department of the People’s Republic of China with an investigation during the period of his absence.”
Another factor blamed for the poor performance in 2018 was the lack of a $26m “reversal of impairment of trade and other receivables” that was seen in 2017. This resulted from the reclassification of equity investments to fall under the new standards for financial reporting in Hong Kong. The reclassification came into effect on January 1, 2018.
Philippines struggles
There were also rising expenditures for new facilities at the Jeju Shinhwa World. The new resort hotel at this facility is scheduled to open during the second quarter of 2019. The hotel will have more than 500 rooms and ultra-modern amenities.
There have been a lot of problems with the company’s resort in the Philippines because of the government crackdown on resorts there.
Landing International had received a provisional license from the Philippine Amusement and Gaming Corporation (PAGCOR) to deliver a new resort in Entertainment City in the capital of Manila.
They even held a ground-breaking ceremony in August 2018 for this new development. However, the Philippines president did not like the lease contract terms and put a halt to proceedings.
The company said about this delay: “As at the date of this announcement, the company has not received any official decision from the government of the Philippines regarding this matter… the company will inform the shareholders or potential investors of the company in case [there is] any progress of such project.”