Legoland Still Haunted by the "Legoland Crisis"... Theme Park Endures Ongoing Deficits

Complete Capital Impairment Continues for Second Consecutive Year
Operating Losses Persist Since Opening in 2022
"Impact of Recognizing Impairment Losses on Tangible Assets"
Focusing on Ticket Discounts and Family-Oriented Content
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Legoland Korea Resort (Legoland), which entered the market as South Korea's first global theme park, managed to partially reduce its operating loss last year but remained in a state of complete capital impairment. Despite efforts to bounce back by introducing new attractions and continuing facility investments, the number of visitors still fell far short of the initial targets set at the time of opening. With a new CEO in place and enhanced ticket discount benefits marking the start of a new season, attention is focused on whether the company can improve its performance.

Legoland Korea Resort. Courtesy of Legoland

According to the audit report submitted by Legoland to the Financial Supervisory Service's electronic disclosure system on the 21st, the company's total equity last year stood at negative 136.4 billion won, confirming its state of complete capital impairment. The company's accumulated deficit reached 227.4 billion won, exceeding its capital of 90.5 billion won. This figure includes a net loss of 35.9 billion won for last year and an accumulated deficit of 191.5 billion won carried over from the previous year. Short-term liabilities due within a year amounted to 139.2 billion won, which is 132.8 billion won more than its current assets (6.4 billion won), indicating that liquidity risk persists.

As of the end of last year, the debt ratio stood at 414%, a significant decrease from the previous year's 3,286% thanks to a capital increase through a rights issue. The debt ratio, a key indicator of a company's financial health, measures liabilities against equity, and a figure over 400% is considered indicative of high insolvency risk and difficulty in securing financing.

This theme park fell into capital erosion in its first year of operation after being hit by the so-called "Legoland Crisis," a real estate project financing (PF) default originating in Gangwon Province. The crisis gained national attention in September 2022 when Gangwon Province Governor Kim Jin-tae mentioned the plan for Gangwon Jungdo Development Corporation, which was responsible for Legoland's development, to file for corporate rehabilitation, thereby triggering the real estate PF problem now known as the Legoland Crisis.

As a result, the park posted an operating loss of 6 billion won in its first year and 20 billion won the following year, never once turning a profit. Revenue also dropped from 62.2 billion won in the first year to 39.8 billion won last year, about 60% of the initial figure. Last year's operating loss was 16 billion won, reduced by about 4 billion won compared to the previous year, but the company still failed to escape the red.

The main reason cited for the poor performance is its geographical disadvantage. Located on Jungdo, an island in Uiam Lake in Chuncheon, it takes more than two hours to reach the site by car from central Seoul. The focus on attractions for young children and the limitations of an outdoor theme park, which restricts the number of operating days throughout the year, are also cited as unfavorable factors for expanding the visitor base. In fact, according to recent data released by Chuncheon city council member Yoon Minseop (Justice Party), Legoland recorded 573,979 visitors last year, which is far below the initial annual target of 2 million visitors set by Legoland at the time of opening.

However, Legoland explained that the deficit widened due to accounting for the decline in asset value, such as attractions, as a loss. Previously, the company conducted an impairment test on tangible assets in consideration of the decrease in visitors and revenue at the end of 2024 and reflected an impairment loss of 104.8 billion won. Legoland is bound by an agreement to purchase park assets worth 80 billion won owned by Gangwon Jungdo Development Corporation if commercial operations cease within five years of opening. For this reason, the likelihood of an immediate withdrawal from the domestic business is low.

Earlier this year, Lee Seongho, the former head of Sea Life COEX Aquarium, was officially appointed as the new CEO, and the company is aiming for a turnaround by focusing on specialized content for children and families. Notably, it is running the first seasonal program of the year, “Go Full Ninja,” until next month, in celebration of the 15th anniversary of the Ninjago IP, one of Lego’s flagship intellectual properties.

To attract more visitors, Legoland also strengthened its discount benefits. The company introduced a combined annual membership for 99,000 won, which includes access to Sea Life COEX Aquarium in Seoul and Sea Life Busan Aquarium, and also added free parking benefits. Both Sea Life COEX and Busan Aquariums are operated by Merlin Entertainments, the UK-based operator of Legoland. Online communities have responded positively, noting that while a single admission to either the aquarium or Legoland costs over 30,000 won, the annual membership offers almost free access. From April 24 to 30, the park is also running a promotion offering up to 41% off a one-day admission ticket and up to 25% off hotel packages.

Legoland stated, “The maximum daily number of visitors has increased by more than 50% compared to the previous year, and annual pass sales have tripled. We aim to return to profitability by diversifying content and expanding ticket sales channels.”

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