DXB Entertainments narrows second quarter loss as visitor numbers rise
Dubai's theme-parks operator posts Dh232m loss in the three months ending June 30
DXB Entertainments, the Dubai theme-parks operator of Legoland and Motiongate, narrowed its second-quarter loss by 10 per cent as visitor numbers increased and expenses fell.
Loss for the period stood at Dh232 million in the three months ending June 30, compared to Dh258m in the year earlier period, DXB Entertainments said on Thursday in a regulatory filing to the Dubai Financial Market, where its shares are traded. Second-quarter revenue declined five per cent to Dh109m.
"We have continued to focus on our cost optimization and efficiency, delivering a 17 per cent improvement in our adjusted EBITDA loss during the period," said Mohamed Almulla, chief executive of DXB Entertainments. Operational expenditure savings will play an important part in the company's strategy to achieve a Ebitda breakeven in the second half of 2020, he added.
"We are continuing to review our cost base to implement further operational efficiencies, the results of which we will present to the market in the third quarter," Mr Almulla said.
DXB Entertainments, which has been unprofitable since it listed to the Dubai stock exchange in 2014, scrapped plans earlier this year to open a Six Flags theme park in the emirate due to a lack of financing. The continued streak of losses in the second quarter sent its shares down by 3.72 per cent in Dubai at 9:15am.
DXB Entertainments saw a five per cent increase in the total number of visitors during the second quarter as 641,000 people flocked to its theme parks.
Revenue for the second quarter declined to Dh109.5m, from Dh115.8m in the same quarter a year ago, according to its financial statement.
DXB Entertainments said it decided to focus on its core asset, the Dubai Parks and Resorts.
As part of this realignment, the company reached an agreement with its majority shareholder Meraas to discontinue the management of its portfolio of leisure and entertainment assets, starting from mid-September.
Paul Parker, the company's chief commercial officer, will leave DXB Entertainments and the company will provide an update about his replacement "in due course," it said without providing reasons or a timeline for his departure.
In July, the company announced it had reached an agreement with US company Six Flags allowing the Dubai-based parks operator to retain exclusive rights of first refusal to utilise the Six Flags brand in the UAE for a period of five years. DXB Entertainments will pay $7.5 million (Dh27.5m) to Six Flags as part of the agreement.
The company will allocate a select portfolio of 10-12 rides purchased for the previously planned Six Flags Dubai park, to Motiongate Dubai and Bollywood Park Dubai to "increase dwell time and drive repeat visitation," it said.
International visitor numbers grew to represent 40 per cent of the overall visitor mix. The growth in international visitation was driven by the hotel strategy, which is designed to attract higher yielding international visitors, it said.
Occupancy at its Lapita Hotel rose to 63 per cent in the first half of the year, from 55 per cent during the same period last year.
Updated: August 8, 2019 10:16 AM