More visitors help Euro Disney cut loss
Philippe Bourguignon, chairman and chief executive, said: "This improvement reflects our strong commercial performance, notably in the hotels. Of particular significance is that it comes at a time when many tourist destinations are experiencing tough market conditions."
As well as Euro Disney's success in compensating for the increasing interest bill, the company pointed to a reduction in the effect of seasonal fluctuations in demand. The first half is traditionally quiet for Euro Disney, which has struggled to attract visitors outside the hot summer months.
The reduction in losses from Fr241m in the first half of 1995 was helped by a jump in sales from Fr1.68bn to Fr1.90bn. At the operating level, profits of Fr58m, an improvement of Fr140m, were the first positive result since the park opened.
Theme park revenues were increased by 11 per cent to Fr910m as lower prices had the intended effect of boosting attendance numbers. Hotel revenues were 17 per cent better at Fr819m.
Those improvements more than made up for higher lease and financial charges, which are estimated to be Fr120m higher for the full year. The rising cost of servicing Euro Disney's debt burden, however, precluded a dividend, which has been passed for two years now.
The improvement in performance at the park has been dramatic since the restructuring of 1994 rescued it from the brink of collapse, although it is thought unlikely to ever be the money machine Disney dreamed of.
Attendance improved by 20 per cent last year to a record 10.7 million and it is expected to grow to over 11.5 million this year. Hotel occupancy, which was only 55 per cent in 1993 increased to 68 per cent in 1995, substantially higher than the average for the area around Paris. Higher attendances have also fallen through into lower costs per visitor, which fell 20 per cent last year.
Shares in Euro Disney, which reached 751p at their peak in early 1992, closed 11p higher yesterday at 205p. Nigel Reed, an analyst at Paribas Capital Markets warned, however, that Euro Disney hasn't yet proved it can sustain current growth in the face of increased interest payments on its Fr15.1bn debt. He said first-half results, which include the traditionally slower months, were not an accurate gauge of the park's performance.
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