25 Jul 2019
Six Flags franchises back on track as work in China set to restart
BY Tom Anstey
Six Flags is starting to get back on track with its international projects after the operator revealed it expected to resume development on its halted China projects within the next six months.
The operator revealed problems with some of its development projects in China in February, blaming a weakening of the Chinese economy, the introduction of new policies and regulations, and the introduction of new leaders in local government for delays to its Chongqing and Nanjing parks.
Following the company's recent earnings report, Marshall Barber, chief financial officer for Six Flags, revealed positive news for its China projects, which are starting to get back on track.
"Our partners have progressed with the government approval process and construction has continued in Chongqing," he said, speaking during an earnings call.
"We're hoping to resume development and revenue recognition for Nanjing later in the year or early next year.
"Revenue from our international agreements should accelerate further, as we receive approvals in China, continue to add new locations and over the medium-term begin opening parks."
Despite the positive news, Marshall did say that international revenue could remain "lumpy" going forward. This would be particularly true if the delays affect the park's opening date or broader macroeconomic issues in China persist.
The operator also revealed in February major funding issues for its Dubai development, with finance for the desert project drying up owing to the operator DXB Entertainments' existing three parks performing poorly since launch.
In its earnings report for the quarter, Six Flags revealed international agreements revenue was up US$7.5m (€6.7m, £6m) or 32 per cent in the first half of 2019, with total revenues of US$20m (€18m, £16m). This included a US$7.5m settlement related to the Dubai project, which it was confirmed had been terminated by DXB.
"We're building our international franchise," said Jim Reid-Anderson, Six Flags CEO. "Our strong global brand allows us to extend into emerging markets, where the middle class is growing and entertainment options are limited, providing growth above and beyond our domestic markets with zero capital investments. We have eight parks in three locations under construction and are working to restart construction on four additional parts in managing China.
"Our pipeline remains robust and we're optimistic that we will be able to announce new locations in the coming year."
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