Euro Disney Records 22% Loss, Places Hope in Summer Visits
The Euro Disney theme park near Paris reported a 22-percent increase in its net loss for the first half of its financial year on Monday and warned it might have to take cost-cutting action.
Euro Disney, the biggest amusement park in Europe and celebrating its 20th anniversary, reported a net loss of 100.8 million euros ($130.6 million), an increase of 21 million euros from the loss for the first half 12 months ago.
The company reported an increase in an operating loss of 38.0 percent to 84.7 million euros, and an 8.0-percent fall in sales to 552.4 million euros.
Euro Disney has debt of nearly 1.8 billion euros and has to meet pre-set objectives each year.
The firm warned that if it was on a course to miss these targets it would have to reduce operating costs and some investment, and sell assets or seek help from parent company The World Disney Company or other parties.
However, the management held that currently it had enough resources for the foreseeable future, including lines of credit from TWDC.
Another factor was a possibility to delay conditionally the payment of part of management and license fees due and interest, the company said in a statement.
Euro Disney intends to repay loans of 72.1 million euros in the second half, in line with targets laid down.
The number of people visiting its attractions and its hotels fell, in a "difficult" context for the economy, but despite the hard time the average amount spent by each visitor rose.
The accounts were also burdened by big charges for renovation and for the launch of new attractions to mark the 20th anniversary of the creation of Euro Disney on a green field site east of Paris.
In its 20-year life, Euro Disney which involves important real estate interests has encountered various severe financial difficulties.
Deputy chief executive Mark Stead, commenting on the latest figures, told Agence France Presse: "We have withstood the (economic) crisis very well."
He expected investment marking the 20th anniversary to boost activity in the second half of the firm's financial year from April to September.
This period is usually the stronger part of the firm's year because it coincides with the summer holiday period in the northern hemisphere.
"We are already seeing encouraging signs for the second half with an increase of hotel reservations," he said.
The average amount spent by visitors rose by 2.0 percent to 44.11 euros per day in the parks and by 4.0 percent to 207.29 euros per room in the hotels, owing mainly to an increase in prices.
The number of visitors to the parks fell by 1.5 percent to 6.9 million and the rate of occupation in the hotels by 3.6 points to 79.8 percent.