Kumho Resort, Opposing Park Cheolwan's Acquisition, "Surprising Profit Turnaround in First Year of Acquisition"

Kumho Petrochemical Group "Despite Absorbing Pre-Acquisition Losses, Net Profit of 2.7 Billion Won in Just Three Quarters"

Exterior view of Kumho Jeju Resort. (Photo by Kumho Petrochemical Group)

[Asia Economy Reporter Moon Chaeseok] Kumho Petrochemical announced on the 21st that "Kumho Resort has made a 'surprising turnaround to profitability'." Ahead of the regular shareholders' meeting next month, former Executive Director Park Cheolwan, who triggered a management rights dispute known as the 'nephew rebellion,' quickly opposed the acquisition with a shareholder proposal, but the company countered by stating it turned a profit within just three quarters.

According to Kumho Petrochemical, the resort had been operating at a loss for two consecutive years from 2019, before the COVID-19 outbreak, through 2020, after the outbreak. However, last year it recorded an annual operating profit of 500 million KRW and a net profit of 2.7 billion KRW, marking a turnaround to profitability. Last year's annual sales also increased by 24% compared to 2020, before the acquisition, reaching around 70 billion KRW.

Kumho Petrochemical claims that this performance turnaround is thanks to the investment efficiency of Chairman Park Chan-gu. The company stated, "The cause of the resort's losses was a cash crunch due to the parent company's stagnant investments, which was a more fundamental issue than COVID-19," adding, "At the time of acquisition, Chairman Park, who was CEO, immediately formed an acquisition task force (TF) to conduct a thorough diagnosis of all resort business divisions and swiftly executed optimized investments to restore financial soundness."

According to Kumho Petrochemical, last year's annual results for the resort include losses from the first quarter before it was incorporated into the group. The company said, "It is no exaggeration to say that it transformed into a completely different company with excellent profitability in just nine months," and added, "This turnaround to profitability has led to evaluations that Chairman Park's foresight was appropriate."

This message directly refutes former Executive Director Park's claim that the resort has no business connection with petrochemicals and that the acquisition would damage the corporate and shareholder value of the petrochemical business, so the acquisition should be abandoned. Former Executive Director Park had made a shareholder proposal suggesting that rather than forcibly proceeding with the acquisition despite the resort's high debt ratio, it would be more urgent to increase dividend levels.

Meanwhile, the resort announced plans to manage profitability by establishing a facility management team and a marketing team. It also revealed plans to open a camping zone equipped with caravan glamping facilities, a convenience store, a terrace cafe, and shower rooms on a site of about 6,000 pyeong near 'Asan Spavis,' which has a water park and hot springs, in June. Improvements were also made to the golf course Asiana CC. CEO Kim Seong-il said, "I hope Kumho Resort will take another leap forward this year with the new organization," adding, "The management will take responsibility and work together with employees to make efforts."

This content was produced with the assistance of AI translation services.