Euro Disney posts losses

Confirming market expectations, the beleaguered Euro Disney theme park yesterday posted a first-quarter consolidated net loss of 492 million francs ($ 92.8 million) on operating revenue of 944 million francs ($ 178 million).

The latest results, which are unlikely to ease concern over the park’s performance at parent company Walt Disney, follow a $ 35 million loss for fiscal 1992.

In a statement released early Tuesday, park management blamed the poor showing on “seasonally low attendance and occupancy, combined with a high level of fixed charges and continued high interest rates.”

Predictions that the Paris stock market would react to the losses by sending share prices tumbling proved unfounded. In fact, Euro Disney shares climbed to 67.2 francs ($ 12.6) having started Tuesday at 64.7 francs ($ 12.2). That still leaves them well below the 72 francs ($ 13.5) issue price.

“I think the results were actually a little bit better than we had expected,” said Paribas analyst Nigel Reed. “I thought the first-quarter losses would be in the region of 600 million francs ($ 113 million). I’m still not changing my end-year predictions which we expect to show a loss of around 1 billion francs ( $ 188 million).”

Most analysts in London and Paris now agree that Euro Disney is unlikely to stem the flow of red ink until the fourth quarter of this year. Park insiders admit that they expect second-quarter losses to be more than 500 million francs ($ 94 million) despite the current campaign to encourage visitors from the Paris region to make the trip to the Marne-la-Vallee site.

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