Losses for DFM-listed DXB Entertainments grew nearly six-fold for the second quarter, forcing the company to introduce a new business strategy.
The Dubai Parks and Resorts operator reported on Wednesday Dh286.2 million in losses for the quarter that ended in June, compared to Dh41.3m a year earlier. Revenues fell to Dh119.6m in the second quarter from Dh159.9m for the first three months of the year.
DXB has now made the decision to create three new business units to better manage assets, the company said. The new divisions, theme parks, family entertainment centres and retail and hospitality will have new company heads reporting to DXB’s chief executive. The company said that the new hires “have been made by DXB to ensure the divisions are led by regional industry specialists with proven management experience”.
“We are re-organising the business into three operating business units which aligns DXB with our strategic growth objectives,” said Mohamed Almulla, chief executive of DXB. “The new structure and the industry specific talent we are bringing on board will help to drive value across DXB’s leisure and entertainment portfolio.”
Shares for the company opened 3 per cent lower at 80 fils on Wednesday morning.
DXB said earlier this year that it was targeting India, Saudi Arabia and the UK to shore up tourism to its Dubai theme parks. The park operator said that upcoming quarters would be more indicative of the destination’s appeal to visitors around the world.
But now the entertainment company is looking to revamp its pricing structure in order to shore up more visitors. Mr Almulla said that the remainder of the year will be focused on driving visitor volumes by simplifying pricing structures and revising annual pass offerings.
DXB expects to continue slow foot traffic through the third quarter given the hot weather, but expects to drive growth in the last three months of the year.
Mr Almulla added: “We expect to see a marginal impact on revenue from the current operations of third party assets, but w th potential to generate further revenue from cross asset marketing and selling and the opportunity to manage other leisure and entertainment assets in the future.
Earnings came in well-below expectations, with the National Bank of Abu Dhabi (NBAD) cutting its rating on the stock to hold versus buy in its report last month. “DXB has come up with a new organisational structure to enhance effective management and return on its assets, which would benefit the company over the medium-term,” said Sanyalak Manibhandu, NBAD’s head of research.
SOURCE: The Nationals