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Euro Disney Profit Falls 21%; Costs of 2nd Park Cited

November 15, 2001|RICHARD VERRIER | TIMES STAFF WRITER

Euro Disney reported a 21% drop in profit for its fiscal year, but said the results mostly reflected the costs of opening a new theme park, not a tourism slowdown triggered by the Sept. 11 attacks.

"I want to cut short this rumor that visits to the park have fallen sharply," Euro Disney Chairman Jay Rasulo said Wednesday morning. "Christmas reservations have begun well. Except for the convention business, turnover is comparable to the same period a year ago."

Rasulo said that fallout from the terrorist attacks on the World Trade Center and the Pentagon had little effect on business at the theme park east of Paris and that the company was still on track to meet its financial targets this year with the opening of a second theme park.

By contrast, Disney's domestic theme parks have been severely affected in the last two months, with attendance down 25% at Walt Disney World. Disney owns 39% of Euro Disney.

For its fiscal year ended Sept. 30, Euro Disney said its revenue grew 4.8% to $883 million, while operating income rose 5.3% to $163.5 million. The park drew 12.2 million people, compared with 12 million a year ago.

However, Euro Disney's net profit fell 21% $26.9 million, which fell short of analysts' expectations of $30.9 million, according to a poll by JCF Group.

But company officials said the decline was due to costs of opening its new theme park and the early repurchase of convertible bonds to lower the company's debt.

Walt Disney Studios Park is set to open next to Euro Disney on March 16, a month earlier than anticipated, because construction is running ahead of schedule. The project, expected to cost $538.6 million, will increase the number of hotel rooms in the Disney resort area from 5,800 to 9,000 and draw an additional 16 million to 17 million visitors a year by 2003, company officials said.

Opening a second park fits in with Disney's strategy of trying to create resort destinations modeled on Orlando's Walt Disney World that draw visitors for several days.

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Times wire services were used in compiling this report.

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