Euro Disney Sees Net Losses For At Least Several Years
By Christina Passariello, Of DOW JONES NEWSWIRES, Dow Jones
PARIS -(Dow Jones)- Troubled theme park operator Euro Disney SCA (12587.FR) expects to record net losses "for at least the next several years," indicating that the crucial debt restructuring program the company is completing will not restore it to financial health any time soon.
According to a management report signed by Euro Disney's chief executive Andre Lacroix, the company expects its operating margin and net income to continue to suffer from full royalties paid to 41%-owner Walt Disney Co. (DIS), management fees, interest expenses, and depreciation and amortization.
The management report is part of a 320-page document published on Euro Disney's Web site ahead of a shareholder's meeting on Dec. 17.
The Marne-la-Vallee-based operator of Disneyland Paris and Walt Disney Studios has called the shareholders' meeting to vote on a crucial debt restructuring, including a EUR250 million capital increase, as well as to approve the annual accounts.
In its most recent financial year, ended Sept. 30, Euro Disney's net loss widened to EUR145 million from a pro forma loss of EUR58 million the year before.
Andre Lacroix, Chief Executive of Euro Disney, said in the shareholder meeting documents that "for the second year in a row, our financial results were disappointing."
However, Euro Disney doesn't see any improvement in its results, despite the financial restructuring.
In the documents, the company sets an objective of maintaining its EBITDA margin at the same level next year as this year. It said it will attempt to control marketing and sales expenses but that labor expenses will increase next year.
Euro Disney recorded an operating loss of EUR24 million this year, but excluding depreciation and amortisation, its EBITDA margin was 12%. Euro Disney declined to give more specific details on its outlook.
After two years of flat attendance at 12.4 million visitors, Euro Disney said it is seeking attendance growth next year, but did not announce a target. In addition, it plans "regular admission price increases" to boost per guest spending.
However, Euro Disney admitted that the closure of its popular Space Mountain ride between January and March could cut into attendance in the first half. The ride is being relaunched to include a "new twist."
Euro Disney reveals in the documents that three major new attractions will open between 2006 and 2008 and that two of them will be located at Walt Disney Studios. The Studios park has underperformed since its launch in 2002 and many visitors have complained that it doesn't have enough attractions.
Building the new rides will call for a dramatic increase in capital expenditures. Euro Disney has budgeted EUR130 million in investments for 2005, compared with EUR29 million this year. The company foresees that spending will continue to be elevated in 2006 and 2007.
Company Web site: http://www.eurodisney.com
-By Christina Passariello, Dow Jones Newswires; +33 1 4017 1740; christina.passariello@dowjones.com
Dow Jones Newswires 11-30-040508ET
Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.
2004-11-30 05:08 -05
Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.
By Christina Passariello, Of DOW JONES NEWSWIRES, Dow Jones
PARIS -(Dow Jones)- Troubled theme park operator Euro Disney SCA (12587.FR) expects to record net losses "for at least the next several years," indicating that the crucial debt restructuring program the company is completing will not restore it to financial health any time soon.
According to a management report signed by Euro Disney's chief executive Andre Lacroix, the company expects its operating margin and net income to continue to suffer from full royalties paid to 41%-owner Walt Disney Co. (DIS), management fees, interest expenses, and depreciation and amortization.
The management report is part of a 320-page document published on Euro Disney's Web site ahead of a shareholder's meeting on Dec. 17.
The Marne-la-Vallee-based operator of Disneyland Paris and Walt Disney Studios has called the shareholders' meeting to vote on a crucial debt restructuring, including a EUR250 million capital increase, as well as to approve the annual accounts.
In its most recent financial year, ended Sept. 30, Euro Disney's net loss widened to EUR145 million from a pro forma loss of EUR58 million the year before.
Andre Lacroix, Chief Executive of Euro Disney, said in the shareholder meeting documents that "for the second year in a row, our financial results were disappointing."
However, Euro Disney doesn't see any improvement in its results, despite the financial restructuring.
In the documents, the company sets an objective of maintaining its EBITDA margin at the same level next year as this year. It said it will attempt to control marketing and sales expenses but that labor expenses will increase next year.
Euro Disney recorded an operating loss of EUR24 million this year, but excluding depreciation and amortisation, its EBITDA margin was 12%. Euro Disney declined to give more specific details on its outlook.
After two years of flat attendance at 12.4 million visitors, Euro Disney said it is seeking attendance growth next year, but did not announce a target. In addition, it plans "regular admission price increases" to boost per guest spending.
However, Euro Disney admitted that the closure of its popular Space Mountain ride between January and March could cut into attendance in the first half. The ride is being relaunched to include a "new twist."
Euro Disney reveals in the documents that three major new attractions will open between 2006 and 2008 and that two of them will be located at Walt Disney Studios. The Studios park has underperformed since its launch in 2002 and many visitors have complained that it doesn't have enough attractions.
Building the new rides will call for a dramatic increase in capital expenditures. Euro Disney has budgeted EUR130 million in investments for 2005, compared with EUR29 million this year. The company foresees that spending will continue to be elevated in 2006 and 2007.
Company Web site: http://www.eurodisney.com
-By Christina Passariello, Dow Jones Newswires; +33 1 4017 1740; christina.passariello@dowjones.com
Dow Jones Newswires 11-30-040508ET
Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.
2004-11-30 05:08 -05
Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved.