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Hotel Shilla Traditional Hanok Hotel Bird's Eye View. (Photo = Hotel Shilla) |
[Alpha Biz= Reporter Kim Minyoung] On the 29th, Kiwoom Securities assessed that Hotel Shilla had disappointing results for the second quarter of this year. They expect the challenging operating environment to persist for the time being and did not provide specific investment recommendations or target prices.
Kiwoom Securities noted, “Hotel Shilla’s second-quarter consolidated operating profit decreased by 59% year-over-year to 27.6 billion won, falling short of market expectations. Despite a recovery in Chinese inbound tourism, the company faced weak demand for duty-free goods and continued burdens from overseas airport shop rents, resulting in disappointing performance.”
They further explained, “In the TR (Travel Retail) segment, despite increased sales from airport duty-free stores, the decline in daigong (proxy purchasing) sales led to revenue levels similar to the previous quarter. Operating profit decreased compared to the previous quarter, excluding the effect of patent fee reversals, due to weak demand and continued burdens from overseas airport shop rents.”
Kiwoom Securities also highlighted that the hotel and leisure segment saw a reduction in operating profit despite increased revenue from stay-centric sales. This was due to a high base effect from reduced labor costs in the previous year and increased fixed costs such as maintenance expenses.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
