Casino operator Grand Korea Leisure (GKL) saw its first-quarter profits fall by more than half despite sales suffering only a modest decline during the period.

Figures released Thursday show GKL’s sales totaled KRW109.2b (US$92.5m) in the first three months of 2019, a 10.5% decline from the same period last year. But gross profit was down 37.5% to KRW24.5b and net income plunged 51.3% to less than KRW8.5b ($7.2m).

GKL, which is controlled by the South Korean government and operates three Seven Luck-branded foreigners-only casinos – two in Seoul and the other in Busan – didn’t offer any explanation as to the disparity between its sales and profit figures.

However, the company reported a significant rise in “rental expenses,” which shot up nearly 79% to KRW6.2b and ‘commissions’ were up more than 40% to over KRW6.6b. The company also booked nearly KRW5.4b in ‘depreciation expenses on right of use assets.’