DXB Entertainments, the owner of the group of theme-parks Dubai Parks and Resorts, announced an increase in its first quarter (Q1) loss for 2019.
The company’s Q1 2019 net loss amounted to 215.71 million UAE dirhams ($58.73 million), compared to 210.42 million dirhams in Q1 2018.
Mohamad Haidar, associate director at Arqaam Capital, told Zawya by email that the wider net loss could be attributed to a drop in revenues and higher finance charges.
The company’s revenue fell 17.77 percent to 142.41 million dirhams in Q1 2019, compared to 173.18 million dirhams in Q1 2018, below Arqaam Capital’s estimate by 23 percent. Finance charges in Q1 2019 amounted to 92.93 million dirhams, compared to 69.61 million dirhams in Q1 2018, a 33.5 percent increase.
DXBE said in a press release that the total visits in Q1 2019 were 760,000, compared to 851,000 in Q1 2018. International visitors now represent 45 percent of footfall.
“We think that footfall will remain flat in 2019 (at approximately 3 million visits), but can grow to 4 million visits in 2020, while we think that revenues need to grow by more than 50 percent before EBITDA breakeven can be reached,” Haidar said.
The company’s EBITDA reached 21 million dirhams in Q1 2019, compared to 19 million dirhams in Q1 2018, a 10.5 percent gain.
“DXBE targets EBITDA breakeven by H2 (second half of) 2020, which we view as challenging in light of Q1 footfall and revenue growth. But Expo-linked tourism could help boost numbers in FY 20-21e,” Haider said.
In February, DXBE announced that it had put on hold plans to build the Six Flags theme park in Dubai, as the financing for the project was no longer available. (Read more here).
The company’s shares closed 5.98 percent higher at 0.195 dirhams on Tuesday.
Haidar said that Arqaam Capital continued to hold an 'Avoid' recommendation on DXBE's stock, with a target price of 0.14 dirhams.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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