Dubai theme parks operator's results missed analysts' estimates
DXB Entertainments to review expansion after Q2 loss narrows
DXB Entertainments, the Dubai theme park operator, will review its future expansion plans after narrowing its second-quarter loss on higher visitor numbers and lower costs.
The company's board of directors has mandated management to "evaluate DXB Entertainments’ future development plans and capital deployment," the Dubai-listed firm said in a statement on Thursday. The review will cover expansion zones including Six Flags Dubai, its new theme park expected to open in 2019, to determine scope and timelines.
"All feasible options will be presented to the board later in the year for final discussion on the strategy going forward," it said, without elaborating on the options to be evaluated.
DXB Entertainments owns Dubai Parks and Resorts, a group of entertainment parks that include Legoland and a Bollywood-inspired attraction. The company said on Thursday its second quarter loss narrowed 11 per cent to Dh255 million from a year earlier. This came below Sico Bahrain's projected loss of Dh203.6m and Egyptian bank EFG Hermes' estimated loss of Dh207m, according to a Reuters poll.
Following years of few entertainment options in the Arabian Gulf, the region is seeing an upswing in the number of new theme parks and attractions, but some have faced initial problems. Launched in late 2016 in phases, DXB Entertainments struggled to meet its initial target for visitor numbers, leading it to slash costs and ticket prices. This year will be the first when all its main attractions are open.
“We expect to deliver year-on-year growth compared to the year ended December 31, 2017," Mohamed Almulla, chief executive and managing director of DXB Entertainments, said. "Our primary focus is on driving footfall, generating repeat visitation through a simplified pricing structure and increasing brand awareness through targeted marketing initiatives."
Quarterly revenues declined 3 per cent to Dh115.8m. The number of visits for the period rose 48 per cent to 612,464 while general, administrative and operating expenses declined 11 per cent to Dh283m from the same quarter last year.
Looking ahead, the company expects to grow visitor numbers from its key markets in the UAE, GCC and internationally, it said.
DXB Entertainments expects its earnings before interest, tax, depreciation and amortization (EBITDA) loss to narrow in 2018 compared to last year when it reached Dh422m, a company spokeswoman said in response to questions. She declined to provide guidance on full-year visitor numbers and revenues or timeline for break-even. Quarterly EBITDA loss fell 39 per cent to Dh67m year-on-year.
Dubai seeks to boost tourist numbers by investing in entertainment options beyond shopping malls and has developed several big theme-park projects to attract visitors and residents. The number of tourists to the emirate in the first half of the year grew 0.5 per cent to 8.1 million visitors, a slower growth rate than the 10.6 per cent it recorded last year.
Abu Dhabi, which is home to the world's fastest roller coaster at Ferrari World, in July opened the 1.65 million square feet indoor theme park, Warner Bros World.
In the first half of 2018, the emirate saw a 5.1 per cent increase in the number of hotel guests to 2.4 million from a year earlier.