Dreamworld owner Ardent leisure HY21 results reveal $83.6 million loss

[Brad2912]

Dreamworld owner Ardent leisure HY21 results reveal $83.6 million loss as it builds new roller coaster

Dreamworld’s parent company is hoping a new roller coaster will help it survive a pandemic spiral which has seen its losses almost treble.

DREAMWORLD’S parent company is hoping a new roller coaster will help it ride out a pandemic spiral which pushed it to a net loss of $83.6 million for the six months to December 31 – almost triple the loss for the same time last financial year.

More than $109 million was slashed from the revenue of Ardent Leisure, which said COVID-19 had hammered a $38.8 million hole in its earnings.

Reporting its half-year result to the ASX, Ardent said revenue from Dreamworld and Whitewater World was down by $23 million due to border restrictions and a shut down that continued until September 16.

The group is hoping its Steel Taipan coaster, which at $32 million is Dreamworld’s biggest ever capital investment, will draw enough domestic guests to make up for the indefinite closure of international borders.

Attendance across both Gold Coast theme parks was down 58.6 per cent for the half, with strong sales of annual passes to the local market – up 92 per cent on the previous year – softening a loss of earnings.

Ardent said it had carved $6 million from its costs and received $12.6 million from government subsidies including JobKeeper and Queensland Government support.

The company said pent up demand from interstate was expected to boost its second half, but it was “reviewing the current business model” due to ongoing uncertainty around COVID-19 and JobKeeper.

Ardent said news of its $32 million Steel Taipan roller coaster, expected to launch in time for Christmas 2021, had been well received by guests.

The rollercoaster is set to hit a top speed of 105km/h and a G-force of 3.8, with multiple inversions and a spinning gondola at the rear of the train.

It will be the biggest single investment in the theme park’s history, and will feature the world’s first “spinning gondola”.

The results included a $3.6 million fine the company was ordered to pay after it pleaded guilty to three charges over the fatal 2016 Thunder River Rapids tragedy.

Ardent said it planned to “vigorously defend” a shareholder class action over the tragedy, which it said was “without merit”.

Revenue for Ardent’s Main Event business in the United States was down $US54.4 million and net earnings dived by $27.3 million, also driven by the pandemic.

https://www.goldcoastbulletin.com.au/business/dreamworld-owner-ardent-leisure-hy21-results-reveal-836-million-loss-as-it-builds-new-roller-coaster/news-story/22226b6f577c001cfd85ff167089aeac

[Jobe]

12 minutes ago, Brad2912 said:

It will be the biggest single investment in the theme park’s history, and will feature the world’s first “spinning gondola”.

Thats interesting. I had thought that the Tower of Terror would have proved to be a bigger investment but I stand corrected. I am guessing this is also taking into account land clearing and theming costs?

[Jdude95]

5 hours ago, Jobe said:

Thats interesting. I had thought that the Tower of Terror would have proved to be a bigger investment but I stand corrected. I am guessing this is also taking into account land clearing and theming costs?

I was curious about this myself and I looked it up. TOT publicly was announced to have cost about $17m in 1997. With inflation, that would be about $26m in 2020. So technically Taipan is the biggest single investment. Sky Voyager publicly cost $20m but god knows how much it actually cost with all the extra bullshit they had to go through in getting it open. 

[TimmyG]

Oh bother. I wonder what this means for Dreamworld and it’s future?

[jjuttp]

2 hours ago, TimmyG said:

Oh bother. I wonder what this means for Dreamworld and it’s future?

Fuck all with the cash injection they got and the vaccine rollout opening the idea of bubbles. Ardents market cap is over 300 million, so yes while a big hit, they also have numerous other business' from bowling to Hypoxi to inject any additional funding that may be needed.

[franky]

1 hour ago, jjuttp said:

[...] they also have numerous other business' from bowling to Hypoxi to inject any additional funding that may be needed.

I'm not sure it's that simple. I was having a dig through the announcement today and found the following excerpt from their ASX Release https://secure.weblink.com.au/Clients/webchartclient/clients/ardentleisure/article.asp?view=21282944 (Page 20)

Quote

Under the terms of the Group’s financing facilities, cash and debt held by the Australian and US businesses are subject to separate ‘ring fencing’ provisions whereby each business cannot access cash or facilities held by the other

To me, this means they can't take money from the US side of the business to prop up Dreamworld if they needed to.

Edit:

Quote

Subsequent repayment of $5.5 million QTC loan in January 2021 has resulted in this facility currently being fully undrawn

I'm not a finance guy, but I'm assuming this is good being that they have repaid the loan from the QLD govt. so they won't have that burden into the future.

Edited February 26, 2021 by franky

[Brad2912]

Here is some of today’s FY21 Ardent presentation 

[themagician]

No surprise that there revenue was less which how this year has been. Good to see that they won’t remove anything else, but no mention of anything new coming (even if it was small). I guess from their perspective, no rides really have long wait times so that means they’ve got enough rides to manage the amount of guests coming through. Which is a sad thought. But hopefully next year we see crowds begin to increase as travel can become more certain. 

[Naazon]

7 minutes ago, themagician said:

No surprise that there revenue was less which how this year has been. Good to see that they won’t remove anything else, but no mention of anything new coming (even if it was small). I guess from their perspective, no rides really have long wait times so that means they’ve got enough rides to manage the amount of guests coming through. Which is a sad thought. But hopefully next year we see crowds begin to increase as travel can become more certain. 

Quote

Work underway on future product with detailed due diligence...

Isn't that saying that they have scoped future attractions and are in final planning stages?

[webslave]

I found it interesting that they pick out that their major attraction count has been "right-sized for current demand" during a pandemic with international and domestic border restrictions, when we are talking about permanently closing attractions rather than mothballing them.

I'd imagine some parks would enhance their major attraction count to generate demand (and, to be fair, they talk in those terms of Steel Taipan), but this just reads like Dreamworld-speak for "achieving the average by lowering the average".

The document seems littered with examples of them talking out of both sides of their mouth.

[themagician]

1 hour ago, Naazon said:

Isn't that saying that they have scoped future attractions and are in final planning stages?

Yeah you’re right. I missed that part.

[New display name]

1 hour ago, Naazon said:

Isn't that saying that they have scoped future attractions and are in final planning stages?

I'm reading they are looking at rides for the future but haven't locked anything in.  Also if you read the part about the hotel, Ardent haven't locked anyone in yet for that project either.

[Naazon]

7 minutes ago, New display name said:

I'm reading they are looking at rides for the future but haven't locked anything in.  Also if you read the part about the hotel, Ardent haven't locked anyone in yet for that project either.

Well if they are onto the Due Diligence, its not "locked in" but they have decided on what they want.

 

Still wouldn't expect any announcement until at least the next FY

[New display name]

That could mean anything.   I think  they are saying.  They aren't going to buy something just because it's cheap and nasty.  Like Buzzsaw.   

[Slick]

I’d say they’re not going to put anymore money on major capex until Steel Taipan has made some money for the park. Whilst fiscally sound and prudent in theory, it demonstrates a lack of understanding about the current climate and the nature of the industry.
 

That is to say, theme parks require constant investment, it’s an unavoidable reality, and in a post-Covid world, everyone’s buying rides, lead times are getting longer and the longer you wait the longer you’re back behind the eight ball to recovery - again. 

[GoGoBoy]

4 hours ago, webslave said:

I found it interesting that they pick out that their major attraction count has been "right-sized for current demand" during a pandemic with international and domestic border restrictions, when we are talking about permanently closing attractions rather than mothballing them.

I'd imagine some parks would enhance their major attraction count to generate demand (and, to be fair, they talk in those terms of Steel Taipan), but this just reads like Dreamworld-speak for "achieving the average by lowering the average".

The document seems littered with examples of them talking out of both sides of their mouth.

Totally agree. And let's not forget that they actually lowered demand themselves by having a major accident and then removing a significant number of popular attractions.

[Tinter]

>Gets $70m loan from government 

>Reports $83m loss

Whoops

[DaptoFunlandGuy]

On 27/08/2021 at 3:05 PM, Tinter said:

>Gets $70m loan from government 

>Reports $83m loss

Whoops

Doesn't get loan

Reports $153m loss

Why whoops? People who are making roaring profits generally don't need to borrow money.

[TimmyG]

I read the reports, and it lists only $13m has been drawn down from the Qld Treasury Loan?