Korea's Walkerhill Hotels and Resorts posts 1st surplus in 11 quarters

South Korea's Walkerhill Hotels and Resorts, run by SK Networks, has returned to the black after two years and nine months thanks to growth in the number of guests thanks to the declining influence of the COVID-19 pandemic.

SK Networks on Tuesday said the hotel in the third quarter posted a surplus by earning 900 million won ($655,000) in operating income on sales of 66.7 billion won, with sales up 54% from the same quarter last year. This was the first time for Walkerhill to finish in the black since a surplus of 1.5 billion won in the fourth quarter of 2019 based on quarterly operating profit.

The hotel had suffered 10 straight quarters of deficit due to the pandemic, from the first quarter of 2020 to the second this year. Over this period, Walkerhill's cumulative operating losses of 78.2 billion won dented SK Networks' performance.

Market analysts say the surplus means both SK Networks and Walkerhill have left the tunnel of business doldrums.

The hotel halted guest stays in 2020 and last year at Grand Walkerhill and Vista Walkerhill in Seoul's Gwangjang-dong neighborhood. With the lifting of many pandemic restrictions this year, however, growth in the number of guests has led to expectations of business recovery.

SK Networks on the same day also announced that its third-quarter operating profit this year on a consolidated basis reached 40.3 billion won, down 14.6% from the same period last year. Sales declined 12.1% to 2.4 trillion won and net profit plummeted 57.2% to 7.9 billion won.

A company source said, "In the mobility sector, SK Rent-a-Car is maintaining its solid result," adding, "In information and communications like wholesale handset distribution, both sales and operating profit fell from last year due to falling domestic sales of new mobile phones."

The company is seeking new engines of future growth, investing $4 million in July in Sabanto, an American developer of self-driving tractor systems, and deciding a month later to buy S-Traffic's electric vehicle charging unit.

Another company source said, "We will speed up the evolution of a proper business model for the changing environment and continue striving to innovate our corporate value by managing the internalization of environmental, social and governance (ESG)."

Write to Ik-Hwan Kim at lovepen@hankyung.com