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DXB Entertainments, the company behind Dubai Parks and Resorts, has reported a net loss of 855 million UAE dirhams ($232 million) for 2019, citing falling attendance and visitor spend.
“The net loss for the year ended 31 December 2019 was 855 million, inclusive of non-cash depreciation of 384 million UAE dirhams, non-cash finance charges of 107 million UAE dirhams and cash finance charges of 278 million UAE dirhams,” the company said in a statement.
The company, however, noted that it was able to narrow down its earnings before interest, taxes, depreciation and amortisation (EBITDA) loss for the full year to 149 million UAE dirhams, an improvement of 90 million UAE dirhams (38 percent) from the previous year, and posted a 2 million UAE dirhams in adjusted EBITDA profit for the three-month period ended December 31, 2019.
The company clarified that the figures used for the net loss and EBITDA are the “adjusted net loss and adjusted EBITDA.”
Revenues for the full year also fell 9 percent to 491 million UAE, but the company remains bullish for 2020, as it plans to go ahead with its expansion strategy by deploying 12 more rides at two of its parks and opening a 250-room hotel before the end of the year.
The Dubai Parks and Resorts is home to Legoland, Motiongate, Riverland and Bolloywood Parks.
The company has been incurring profit losses since its listing on the Dubai Stock Exchange in 2014. Last year, DXB Entertainments cancelled plans to build a Six Flags theme park due to financing constraints.
In its financial report on Sunday, DXB Entertainments indicated a lacklustre performance during the fourth quarter of 2019 alone, with its theme parks business registering a decline in a revenue loss of 11 million UAE dirhams.
“Theme park revenues of 91 million UAE dirhams in Q4 2019 decreased by 11 percent compared to Q4 2018 due to lower visits and per capita spend,” the company said in a statement.
The company’s hotel, Lapita, also incurred a revenue loss of 4 million UAE dirhams during the fourth quarter despite the average occupancy increasing to 68 percent, as the average daily room rates plunged by 24 percent to 597 UAE dirhams during the same period.
Mohamed Almulla, CEO and managing director of DXB Entertainments, said they expect profitability in the first quarter and fourth quarter of 2020, but “Q2 and Q3 will remain loss making.”
“The outlook for 2020 is good, with our park enhancement plan and hotel strategy progressing well. Twelve rides will be added to two of our parks, including three world record rides, before the end of the year,” said Almulla.
Consumer spending at theme parks across the UAE was earlier estimated to grow from $105 million in 2016 to $637 million by 2020, according to figures released by PwC.
(Writing by Cleofe Maceda; Editing by Seban Scaria)
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