Theme park closures sees Dreamworld operator post $137m loss

Theme park closures sees Dreamworld operator post $137m loss
The enforced closures of Ardent Leisure's (ASX: ALG) theme parks in Australia and entertainment centres in the US due to COVID-19 restrictions resulted in the company's loss ballooning to $136.6 million in FY20.

Total reported revenue for the Dreamworld operator decreased by $85 million to $398.3 million in the full year, also due to COVID-19 restrictions on trade.

The results capped off another rough year for Ardent Leisure which was witnessing revenue growth of 5 per cent for the 35 weeks up to the end of February 2020, before the pandemic hit Australia and the US.

However, from March onward, the company only brought in $68.2 million of earnings, compared to $362.3 million generated pre-pandemic.

Ardent Leisure also suffered from an impairment charge of $15.4 million on property, plant and equipment in its theme parks division, and a charge of $2 million relating to the its Main Event business.

The company's chairman Dr Gary Weiss did not play down the disappointing FY20 results.

"The emergence of COVID-19 in the second half of the financial year has had a significant impact on our business," says Weiss.

"Following the restrictions put in place by government and health authorities, we made the difficult decision to close our Main Event centres in the United States and Theme Park businesses in Australia from mid-late March.

"While positive progress had been achieved by Main Event and Theme Parks in the first eight months of the year, our focus turned to capital management and securing capital for the business as the COVID-19 pandemic escalated."

The group's theme parks division, which includes Dreamworld, Whitewater World and Sky Point, reported trading revenue of $54.5 million for the year, down 18.8 per cent.

The division also reported an EBITDA loss of $24 million, compared to an EBITDA loss of $19.8 million in the prior year, largely because of COVID-19 impacts and the associated impairment charge.

In addition, the group's US cinema arm, Main Event, saw revenue decrease by 17.4 per cent.

Main Event has progressively reopened its facilities in May and June, with 38 centres reopened as at 30 June 2020.

Despite the uncertainty, Weiss is optimistic about Ardent Leisure's FY21, particularly because of the government support the theme parks division has received from the Queensland Government ahead of Dreamworld's reopening in September.

"We anticipate uncertain and challenging conditions to continue in FY21, however we believe that the demand for out-of-home family entertainment experiences will be stronger than ever once the pandemic has subsided and restrictions have eased," says Weiss.

"Our guests and team members can be confident we have implemented the highest levels of cleaning and safety standards across out business."

Shares in Ardent Leisure group are down 3.30 per cent to $0.44 per share at 3:54pm AEST.

Updated at 4:21pm AEST on 27 August 2020.

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