HK Disneyland reports first pre-depreciation earnings
Updated: 2011-01-18 17:33
HONG KONG - Hong Kong Disneyland, which was opened in September 2005, revealed its results of the fiscal year (FY) 2010 on Tuesday, which showed the theme park achieved its first notable earnings before interest, taxes, depreciation and amortization (EBITDA) in the last five years of operation.
Hong Kong Disneyland's EBITDA for fiscal year 2010, which ended on Oct 2, 2010, stood at HK$221 million ($28.4 million), in comparison with HK$70 million of losses in the previous fiscal year, the company said in a statement.
It was the first time since 2005 that Hong Kong Disneyland posted notable EBITDA.
Hong Kong Disneyland attributed the major increase in EBITDA to "top-line revenue growth combined with effective cost mitigation".
In FY 2010, Hong Kong Disneyland's revenues increased by 19 percent to just over HK$ 3 billion, thanks to record attendance, occupancy, per capita spending and per room spending.
The theme park welcomed more than 5.2 million visitors in FY 2010, a new record with a year-on-year increase of 13 percent. In the last five fiscal years, its cumulative attendance surpassed 24 million.
Per capita spending in FY 2010 gained 7 percent from a year earlier.
Occupancy of Hong Kong Disneyland's two hotels reached 82 percent, up 12 percentage points from the previous year of 70 percent, according to the statement.
Despite all the record figures, the theme park was still suffering loss in FY 2010. It reported net loss of HK$718 million in FY 2010, a decrease of 45 percent, or HK$597 million, from the previous year, it said.
Hong Kong Disneyland's costs and expenses -- mainly labor, operating and support costs, costs of sales, and marketing and sales expenses -- amounted to HK$2.79 billion in FY 2010.
Depreciation and amortization cost it hK$833 million, and net finance costs including interest expense, stood at HK$106 million, according to the statement.
Surge of mainland visitors
Figures showed that the Chinese mainland replaced Hong Kong as the theme park's single largest source of visitors.
In FY 2010, 42 percent of the 5.2 million, or nearly 2.2 million visitors to Hong Kong Disneyland, came from the mainland, jumping 32 percent from the previous fiscal year.
This share of Chinese mainland's visitors was six percentage points higher from that of FY 2009, and eight percentage points higher from that of FY 2008. Hong Kong's share has declined from 41 percent for 2009 to 33 percent for 2010.
Terming the growth of 32 percent as "really high", Hong Kong Disneyland Managing Director Andrew Kam attributed it to the theme park's increased cooperation with mainland's travel agencies and successful marketing in the mainland.
According to Kam, Hong Kong Disneyland had enhanced communications with mainland's travel agencies through working offices and local staff of Walt Disney at Beijing, Shanghai and Guangzhou.
In 2010, Walt Disney also set up a working office in Chengdu, provincial capital of western China's Sichuan, to improve cooperation with local travel agencies, he said.
Walt Disney, the world's largest media company, owned 47 percent of Hong Kong Disneyland, while the Hong Kong government took the remaining 53 percent.
Hong Kong Disneyland, the world's smallest Disney theme park, was open to visitors on Sept 12 in 2005. It was jointly built by the Hong Kong government and Walt Disney Co, the world's largest media company and theme-park operator.
Kam also forecast Hong Kong Disneyland's attendance for FY 2011 to rise 10 percent, in accordance with the growth of Hong Kong's tourists projected by the city's Tourism Board.
Kam said Hong Kong Disneyland would continue to grow and develop with major expansion underway. Its three new themed areas were expected to be completed in phases by mid-2014, and the expansion will enlarge the theme park by some 23 percent.
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