Hanwha Hotels & Resorts narrows loss in 1Q Korean leisure company posts net profit for first time since 2013

Translated by Kim So-in 공개 2022-05-25 08:11:41

이 기사는 2022년 05월 25일 08:10 더벨 유료페이지에 표출된 기사입니다.

South Korea’s Hanwha Hotels & Resorts, which have been hit hard by the Covid-19 pandemic, is starting to show signs of recovery.

The company posted 142.3 billion won ($113 million) in revenue and 16.1 billion won in operating loss in the January-March quarter. Its revenue increased by 60.98% from the previous year, although it is still half its revenue before the pandemic.

Hanwha Hotels & Resorts consists of two divisions: hospitality and estate. Its hospitality division is the company’s mainstay business, accounting for 122.9 billion won, or 86.4% of its total revenue in the first quarter.

The hospitality division includes tourism and accommodation, catering, sports facilities operations, production and sales of agricultural products, distribution, botanical garden and zoo operations and other financial businesses. The tourism and accommodation business is especially starting to see a rise in demand amid eased social distancing rules in the country.

Hanwha Hotels & Resorts’ operating loss decreased to 16.1 billion won in the first quarter from 26.8 billion won in the same period last year. This was because its cost of goods sold (COGS) to sales ratio dropped from over 100% to a mid-90% level. Yet, its selling, general and administrative expenses (SG&A) to sales ratio rose to offset the decline in the COGS to sales ratio.

Despite continued operating losses, the company recorded a net profit of 12.2 billion won in the first quarter. It was the first time since 2013 that the company posted a net profit in the January-March quarter. It recorded 63.5 billion won in net profit in the first quarter of 2013.

Hanwha Hotels & Resorts transferred assets, liabilities, contractual relationships and employment relationships related to its golf course and an arboretum in Chuncheon, Gangwon Province, to its related party Hanwha Solutions for 61.5 billion won earlier this year.

It is also seeking to sell Golden Bay Country Club in Taean, South Chungcheong Province, as part of its efforts to reduce debts. (Reporting by Hyo-beom Lee)
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