DXB Entertainments posts 22% surge in visits

DXB Entertainments, a leading operator of leisure and entertainment destinations, reported on Thursday a revenue growth of two per cent for 2018 and a 50 per cent year-on-year improvement in Ebitda (earnings before interest, tax, depreciation and amortisation) loss due to cost optimisation initiatives.
The Dubai-based company posted 22 per cent year-on-year increase in visits, approaching 2.8 million in total in the first full year of operations, with hotel occupancy at 60 per cent up from 35 per cent in the prior year.
Mohamed Almulla, CEO and managing director, DXB Entertainments, said the company made good progress in improving the financial and operational performance of DXBE's main asset, Dubai Parks and Resorts. Of the total group revenue of Dh541 million, Dh367 million was generated through the theme parks, Dh92 million through hospitality, Dh30 million through retail and Dh52 million through other revenue streams, including sponsorship, the company said in statement.
"All of our phase one rides and attractions were in place from the start of the year and the Lapit Hotel continues to gain traction. Our cost saving initiatives including renegotiation of key supplier contracts and headcount savings have significantly reduced our cost base and our capital structure has been enhanced through our debt re-alignment and the injection of Dh1.2 billion in the form of convertible bonds from our majority shareholder, Meraas," said Almulla.
He said the company's strategy for targeting residents has been successful with 60 per cent of guests originating from the home market. "However, we need to build our international visitation, which delivers higher yields, and is crucial to delivering our target of Ebitda breakeven during the second half of 2020. The focus of 2019 is ramping up our international visitation whilst maintaining our cost base."
"While I feel that it is early to assess the future performance of a market leading asset that is by nature a long-term commercial proposition, we have, on the basis of prudence, recognised a non-cash impairment charge of Dh991 million in respect of the phase one development of Dubai Parks and Resorts. This is in addition to the Dh 551 million impairment that has arisen as a consequence of the change in direction of the Six Flags Dubai Project," said Almulla.
DXB Entertainments will continue to focus its efforts in 2019 on increasing international visitation to the parks, while sustaining domestic visits and maintaining a tight grip on operational costs as it seeks a target of Ebitda breakeven during second half of 2020, he said. - issacjohn@khaleejtimes.com