09 Aug 2017
Disney's Parks and Resorts division performs well with strong overseas growth
BY Tom Anstey
An increase in visitor spending at Disney's Shanghai and Paris resorts has contributed to strong growth for the company's parks and resorts division, according to its latest earnings report.
Third-quarter revenues rose 12 per cent to nearly US$5bn (€4.17bn, £3.76bn), with growth coming from Disney’s overseas parks, including Shanghai Disney Resort, which has now welcomed more than 13 million guests.
Operating income increased by 18 per cent to US$1.17bn (€996m, £899m).
“Today's results reflect our aggressive investment in our parks and resorts business,” said Disney chair Bob Iger.
“Given the success of these investments and their continued attractive returns, we're continuing to leverage our great intellectual property and numerous investments across that businesses.”
The increase at Disney Shanghai reflected a full quarter of operations, compared to the previous year, which included opening costs. Higher income for Disneyland Paris came from increased guest spending and attendance.
Across both parks, the surge in guest spending was a consequence of higher average ticket prices and increases in food, beverage and merchandise spending.
For its parks in the US, increased costs in labour and new guest offerings were offset by increases in visitor numbers and increased spend.
On the cruise front, the company saw a decrease in occupied room nights and lower passenger cruise days due to the dry-docking of the Disney Fantasy cruise ship, which was taken out of service for the refurbishment and conversion of Disney’s vacation club facilities.
In Disney’s third quarter, nine-month results show investments of US$2.4bn (€2.04bn, £1.84bn) in 2017 compared to US$3.3bn (€2.8bn, £2.53bn) for the same period in 2016. The comparative capital expenditure decline of US$963m (€819.7m, £740.1m) was due to lower investment in Shanghai Disney following its opening last year.
Looking at the bigger picture, for the first nine months of the fiscal year, revenues are up 9 per cent from US$12.58bn (€10.7bn, £9.67bn) to US$13.75bn (€11.7bn, £10.56bn). Operating income is also up, increasing year-on-year by 17 per cent, with US$3.03bn (€2.58bn, £2.33bn) compared to US$2.56bn (€2.18bn, £1.97bn).
Overall, Disney recorded revenues for the quarter of US$14.24bn (€12.12bn, £10.94bn), a minor decrease from the year prior at US$14.28bn (€12.15bn, £10.97bn), due to poor trading in its cable network division.
Operating income was US$4.01bn (€3.41bn, £3.08bn), down 10 per cent from US$4.46bn (€3.8bn, £4.43bn) in 2016. For the first nine months of the fiscal year, revenues were US$42.36bn (€36.05bn, £32.55bn), down marginally from US$42.49bn (€36.18bn, £32.65bn). Profits for the period were US$11.96bn (€10.18bn, £9.19bn), down 5 per cent from US$12.54bn (€10.67bn, £9.64bn).
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