27 Oct 2017
China worth US$1bn a year to Universal, says Comcast CEO
BY Tom Anstey
Comcast CEO Brian Roberts has called China a “very, very big opportunity” for NBCUniversal’s theme park division, making a prediction that the company will generate US$1bn (€1.16bn, £886m) in operating cash flow once its Chinese venture opens its doors to the public.
Universal – owned by Comcast – is currently developing its US$7.4bn (€6.65bn, £6bn) Universal Beijing, which it broke ground on last year. Due to open in 2020, the development will include in its first phase a theme park, the world’s first Universal-themed resort hotel and a retail entertainment complex – all to be completed within five years.
Speaking during Comcast’s Q3 earnings call, Roberts said that Universal’s growth in China had been notable in recent years across multiple parts of its business.
“We think China is a very, very big opportunity for our company,” he said. “Five years ago, we made virtually no money there. This year, we'll make a couple hundred million dollars of operating cash flow – primarily in film, some on demand services and in consumer products.
“We're spending a lot of time and attention getting a park in Beijing open where the visitation and tourist numbers are just phenomenal.
“Universal will be the only major US theme park in that area of China. When the park opens, it's not unrealistic to assume we're going to make well over US$1bn in operating cash flow.”
For its third quarter, revenue at Universal theme parks increased 7.7 per cent to US$1.55bn (€1.33bn, £1.18bn), with earnings before interest, tax, depreciation and amortization (EBITDA) increasing 9.8 per cent to US$775m (€667.6m, £591.5m). Roberts attributed this to Universal’s strong IP lineup, the launch of Volcano Bay and its acquisition of Universal Studios Japan.
“This performance included strong results from Universal Studios Japan where the recently opened Minion Park attraction drove continued growth, a perfect example of leveraging our IP across businesses,” he said. “Japan is having a record year highlighting what a terrific deal it has been for us since our initial investment in the park two years ago.”
For the nine months ended 30 September, revenue from the Universal’s theme parks increased 10.6 per cent year-on-year to US$4bn (€3.44bn, £3.05bn), reflecting higher attendance and per capita spending. In the same period, adjusted EBITDA increased 11.2 per cent to US$1.7bn (€1.46bn, £1.3bn), reflecting higher revenue, partially offset by an increase in operating expenses, including costs to support new attractions.
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