Lack of visitors sees Dreamworld’s value slump $75m
The embattled owner of Queensland’s Dreamworld theme park, Ardent Leisure, has flagged $86 million in writedowns in its parks unit, amid a slow recovery from the 2016 accident that claimed four lives.
The group, which turned in a $63 million loss in the 2017 financial year, says it will slump to a loss of between $84-$94 million in fiscal 2018 as it deals with the ongoing fallout from the Thunder River Rapids Ride tragedy.
Ardent’s earnings before interest, tax, depreciation and amortisation would also drop from a small, albeit positive $1 million to a loss of $50-$55 million over the last financial year.
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Investors sold off the stock this morning as Ardent also recorded a $51 million writedown on its Main Event business in the United States, which had been held out as the primary driver of the company’s future, and a prospective spin-off candidate once it is back on track.
Ardent shares were down 4.13% to about $1.93 as the theme park units’s preliminary, unaudited results for last year showed revenues dipped in the last financial year to a range of $67-$70 million, down from fiscal 2017’s $71 million.
The revaluation adjustment for Dreamworld reflects slower recovery in attendance at the theme park than projected previously
However, the slow recovery produced another year of losses for the business with a range of $91-$95 million expected on top of a $98 million loss in fiscal 2017.
Ardent says revenue from the Australian theme parks division was impacted by a continued slow recovery following the Dreamworld accident in October 2016, as well as discounted ticket pricing and some adverse weather conditions.
The unit’s forecast included a $75 million cut to the value of Dreamworld, $6 million relating to the accident and its aftermath, a $4 million hit to the value of SkyPoint and $1 million off other assets.
Dreamworld continues to battle to attract visitor numbers.
“The revaluation adjustment for Dreamworld reflects slower recovery in attendance at the theme park than projected previously,” Ardent says in a statement.
Ardent says its preliminary, unaudited results for the last financial year included the estimated impact of non-cash valuation adjustments and impairment charges to be recorded in the second half
Main Event’s preliminary, unaudited results showed a lift in revenues to between $355-$357 million in the last financial year, up from $299 million in fiscal 2017. But earnings from the network of US entertainment complexes slumped from $46 million to a range of just $12-$15 million.
Overall revenue from the US entertainment centres unit is expected to grow about 18% but constant centre revenue, on a like-for-like basis, edged up just 1.6%.
The US division’s fiscal 2018 earnings included a non-cash impairment charge of $38m stemming from five underperforming locations, $5 million of pre-opening costs, and $7 million of other restructuring and non-recurring items.
Ardent admits that the impairment for Main Event reflects the difficult trading conditions at the five centres, mainly due to their real estate quality and ongoing legacy brand challenges.
Ardent has reacted by cutting head office costs, and once $4 million in non-recurring items are taken into account, last year’s corporate costs have been slashed by 26% to $12 million.
This article originally appeared on www.theaustralian.com.au/property.
