Shilla Duty Free at the Hong Kong airport
South Korean major duty-free shops were helped by overseas outposts to offset slow business at home due to reduced Chinese tourists in the first quarter.
Hotel Shilla, the operator of Shilla Duty Free, said in a regulatory filing on Tuesday its duty-free unit posted an operating profit of 47.6 billion won ($44.1 million) for the quarter ended March, almost tripled from a quarter ago. Revenue soared 29.3 percent on quarter to 1.01 trillion won. It is the company’s best-ever quarterly performance.
The surge in profit was largely driven by its new outpost at Hong Kong International Airport that raked in 1.1 billion won in net income and 94.2 billion won in sales - a stunning performance in the first three months in business. With full-fledged operation at the Hong Kong airport, Shilla expects sales from overseas could top 1 trillion won for the first time.
Shilla Duty Free runs outposts in Singapore, Macao, Hong Kong, Thailand and Japan.
Hotel Lotte in a regulatory filing on Tuesday said its duty-free business reported an operating profit of 24.8 billion won on sales of 1.27 trillion won over the cited period. The operating profit and sales were down 33.3 percent and 8.4 percent, respectively from the previous quarter.
Its revenue from overseas stores, however, soared 52 percent on year to 46.8 billion won thanks to brisk sales in its newly opened Da Nang store in Vietnam and a 35-percent jump in sales from Japan.
Lotte Duty Free operates in Guam, inner city and gateway in Japan, and inner cities of Indonesia and Japan.
It also is planning to open a new store at Cam Ranh International Airport in Nha Trang and add more tax-exempt stores in major cities of Vietnam and other countries.
On Thursday, shares of Hotel Shilla closed down 0.41 percent at 121,000 won. Hotel Lotte is unlisted.
By Lee Yoo-jin and Lee Ha-yeon
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