DXB Entertainments unveils new business strategy to strengthen its position as the region’s largest operator of leisure and entertainment assets
Financial Highlights (1 Jan – 30 Jun 2017)
 EBITDA for the period 1 Jan-30 Jun 2017 includes pre-opening expenses of AED 61 million.
Strategy and Operational Highlights
DXB Entertainments (DFM:DXBE) (“DXBE”) announced today its 2017 first half financial results as well as unveiling a new business strategy.
Under its new strategy, DXB Entertainments will further enhance its position as the region’s largest operator of leisure and entertainment offerings, which will enable the business to build revenue across a range of assets.
DXBE has entered into a management agreement with Meraas to manage a portfolio of leisure and entertainment offerings including Hub Zero, Splash Pad, The Green Planet, Mattel Play Town and Roxy Cinemas. DXBE intends to seek further opportunities to manage complementary leisure and entertainment offerings in the UAE.
Mohamed Almulla, CEO, DXB Entertainments, said, “This is an exciting strategy which will enable DXBE to generate value for its shareholders through the operation of the region’s largest portfolio of leisure and entertainment assets.
“We already own a great asset in the form of Dubai Parks and Resorts. With the addition of Meraas’ leisure and entertainment portfolio, DXBE will be able to identify and build significant cross-marketing synergies and additional revenue from the co-ordinated management of our diversified portfolio of assets.
“We are re-organising the business into three operating business units which aligns DXBE with our strategic growth objectives. The new structure, and the industry specific talent we are bringing on board, will help to drive value across DXBE’s leisure and entertainment portfolio.
New Organisational Structure
Three new divisions have been created to enhance the effective management of DXBE’s assets and their return potential: Theme Parks; Family Entertainment Centres; and Retail and Hospitality. New hires, who will report into the CEO, have been made by DXBE to ensure the divisions are led by regional industry specialists with proven management experience of delivering customer focused entertainment experiences in Dubai.
Ahmad Hussain, GM of Theme Parks
Ahmad Hussain Bin Essa joins DXB Entertainments as GM of Theme Parks and will be responsible for overseeing the Dubai Parks and Resorts theme parks. Previously he was the CEO of Global Village, the region’s premier cultural and family entertainment destination.
In this new structure, David Loiseau VP of Sales will report into Ahmad Hussain.
Ahmed AlRayyes, GM of Retail and Hospitality
Ahmed AlRayyes initially joined DXB Entertainments in June 2017 as the Chief Corporate Support Officer. Ahmed has now been appointed the GM of Retail and Hospitality, managing the Lapita™ Hotel, Riverland™ Dubai, Roxy Cinemas and the future LEGOLAND® Hotel which is under construction. Prior to joining DXB Entertainments, AlRayyes held the position of Chief Commercial Officer at Global Village, the region’s premier cultural and family entertainment destination
Hani Soubra – VP of Marketing
Hani Soubra joins DXB Entertainments as VP of Marketing and will be responsible for B2C and B2B marketing campaigns, public relations, advertising and sponsorship across DXBE’s portfolio of assets. Hani is a media and communication specialist and the former BBC World’s Regional Director MENA & Pakistan where he was responsible for the commercial development of the business.
We would also like to thank Klaus Assmann, Stanford Pinto, Matt Priddy and Paul La France for their contribution to DXB Entertainments and in the successful delivery of Dubai Parks and Resorts. We wish them all success in their future endeavours.
Q2 2017 Financial Results
DXBE’s main asset during the period, Dubai Parks and Resorts, recorded over 1 million visits during the first six months of the year with over 414,400 visits during the second quarter, reflecting the anticipated reduction in attendance due to seasonality.
DXBE reported AED 119.6 million in total revenue during the second quarter of the year. AED 86.5 million of total revenue was generated through the theme parks, at an implied AED 209 revenue per cap. As at 30 June 2017, DXBE had leased out 51 units at Riverland™ Dubai, representing 84% of the available leasable space, and AED 8 million of total revenue was driven by leasing and non-leasing revenue generated in Riverland™ Dubai. Rent relief has been provided to tenants during the peak summer months, which is reflected in the lower leasing revenue for the second quarter. The Lapita™ Hotel contributed AED 11.4 million of the total revenue, and had an average occupancy rate of 27% and average daily rate of AED 590 during the quarter reflecting its start-up phase.
As at 30 June 2017, total assets stood at AED 12.5 billion, primarily comprising AED 10.3 billion in property and equipment, investment properties, inventories, trade and other receivables. At the end of June, the entire financing facility for Phase I of Dubai Parks and Resorts had been drawn down.
EBITDA loss for the first six months of 2017 was AED 247 million, AED 186 million excluding the AED 61 million of pre-operating expenses, reflecting the normal trajectory of a business in its first year of launch and early phase of operations. DXBE is progressing well towards achieving a 20% operational cost reduction compared to the initial projections, with operating expenses of AED 209 million during the second quarter of 2017.
Mohamed Almulla, CEO, DXB Entertainments, added, “For the remainder of 2017 and into 2018, our primary strategy for Dubai Parks and Resorts is to drive visitor volumes, focusing on repeat visitation from the resident and regional markets. We are in the process of simplifying our pricing structure and revising our annual pass offering, to include competitive pricing, special offers and an attractive package of additional discounts and benefits. Internationally, we will continue to focus on the core source markets of China, Russia, India, the UK and Germany through our tour and travel network.
“We expect to generate moderate visitor figures due to the hot weather in the third quarter, and plan to achieve an increase in visitation and revenue during the last quarter of the year. We expect to see a marginal impact on revenue from the current operations of third party assets but with potential to generate further revenue from cross asset marketing and selling and the opportunity to manage other leisure and entertainment assets in the future.
We have a market leading asset in Dubai Parks and Resorts, and we are proud to have recorded over 1 million visits in the first half of this year. With our new strategy, Dubai Parks and Resorts will play a key part of our plans to generate growth across our leisure and entertainment assets”
For further information, please contact:
Marwa Gouda, Head of Investor Relations, DXB Entertainments PJSC
Jon Earl, Managing Director, FTI Consulting
Anca Cighi, Director, FTI Consulting
DXB Entertainments PJSC
DXB Entertainments PJSC (previously Dubai Parks and Resorts PJSC) is a Dubai-based operator of leisure and entertainment destinations and experiences. The Company is traded on the Dubai Financial Market (DFM) under the trading symbol DXBE. We bring together a diverse portfolio of world-class brands to offer pioneering entertainment in the areas of theme parks, retail and hospitality as well as leisure attractions.
Launched in 2014, DXB Entertainments owns and operates Dubai Parks and Resorts, the largest theme park destination in the Middle East. Spanning 30.6 million square feet of land, the AED 13.2 billion destination consists of four theme parks in one location.
For us, fun means business. With a market cap of AED 10.4 billion as of 31 December 2016, DXB Entertainments is set to become an industry-leading provider and producer of innovative and inspirational entertainment experiences in the Middle East and beyond.
For more information, go to: www.dxbentertainments.com
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