Euro Disney problems not Mickey Mouse

Leaked documents show wider annual loss

PARIS — Walloped by the global tourism slump, Gallic strikes, the SARS scare and the strength of the euro against the dollar, beleaguered theme park operator Euro Disney took more flak Monday.

The company, which runs Disneyland Paris and the adjacent Walt Disney Studios theme park, refused to comment on “illegally communicated” figures indicating that it will post a $67.7 million loss for the fiscal year 2002-03, compared with a $38.6 million loss the previous year.

The leaked info “came from documents and presentations that were internally prepared before the close of the year 2003,” Euro Disney said in a statement, adding that it would publish its earnings in November.

Euro Disney is 39% owned by the Walt Disney Co.

Share price down

The subsid’s already battered share price has slid few cents more, from 70¢ to 66¢, since French daily Le Parisien on Friday quoted a confidential auditor’s report revealing the extent of the losses for the year ended Sept. 30. Company posted a $30.5 million profit in 2001.

Citing the leaked document, Le Parisien said attendance at the two parks was 12.5 million, 600,000 down on last year and 2 million below Euro Disney’s 14.5 million target.

In a further sign of the company’s financial woes, its operating costs were higher than sales, the report said.

Having announced earlier this year that it may not be able to meet debt repayments due in 2004, Euro Disney is in talks with creditor banks to restructure $2.1 billion in debt — for the second time in a decade.

Theme park eats money

Wider economic conditions play a part in Euro Disney’s misfortunes, but the $614 million Walt Disney Studios theme park, which opened in March 2002, is also blamed for deepening the crisis.

Euro Disney had banked on the movie studio theme park luring flocks of new customers. Instead, the facility has swallowed cash that might have been spent on building new attractions in the main theme park.

Despite its problems, Euro Disney can count on the support of parent company Walt Disney and the French government, both of which have already gone to great lengths to ensure the business succeeds.

Walt Disney has waived royalties and management fees this year, and French banks, including the state-owned Caisse des Depots, are expected to play their part in easing Euro Disney’s debt situation.

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