Euro Disney loses pounds 60m but US parent sets record
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Your support makes all the difference.EURO DISNEY, the debt-laden Paris theme park that has struggled to attract enough European tourists, lost Fr492m ( pounds 60m) in the three months to 31 December.
Its results contrasted strongly with figures from the US-based Walt Disney Company, which owns 49 per cent of Euro Disney. It made record first-quarter profits of dollars 260.3m ( pounds 173.5m), up 25 per cent on a year previously, despite a dollars 42.9m equity accounting loss in respect of its French investment.
The American company has been criticised for the size of the fees and royalty payments it is due to receive from the park.
Under pressure from other shareholders it agreed last year to postpone until 1994 at the earliest collection of this year's 3 per cent management fee, but some critics argue it will need to do more in view of Euro Disney's need for further finance.
Euro Disney said that, as expected, 'seasonal factors' had affected theme park attendance and hotel occupancy rates over the winter. But it also blamed the bigger-than-expected losses on the level of fixed charges and high interest rates. Every 1 percentage point movement in French base rates affects profits by about Fr100m.
Analysts estimated that losses for the year to the end of September could rise to Fr750m-Fr1bn. This will pose additional problems for Euro Disney, which, with gearing of more than 250 per cent, needs to raise finance for the second stage of the park. Property development was originally intended to help to finance its expansion but this has been squashed by the recession.
Nigel Reed, an analyst at Paribas Capital Markets, said the park, which has had 8.7 million visitors since it opened last April, seemed to have got off to a slow start in 1993. 'Indications are that they are behind target for 10 million visitors this fiscal year,' he said.
But a spokesman for the company insisted the second quarter was always expected to be quiet.
Euro Disney has had particularly disappointing attendance by French visitors and has recently taken steps to make the company and the park more attractive to them. It has replaced its US chairman with a Frenchman, Philippe Bourguinon, and has offered special entrance fees for local residents.
It claims this approach has begun to pay off, with the proportion of French visitors rising from about 30 per cent to nearer 50 per cent.
Walt Disney's contrasting performance reflected improvements in all business sectors - theme parks, films and videos, and character merchandising.
The films Beauty and the Beast and Aladdin were largely responsible for a record dollars 1.2bn in revenues for its film and video division, more than half first-quarter total revenues of dollars 2.4bn.
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