Village Roadshow Sees 95% Drop in Profit

Submitted by Jim Thesiger on 27 August, 2009 - 14:14

The global media and entertainment company Village Roadshow (VRL) that owns and operates theme parks at Gold Coast of Queensland which includes Sea World, Warner Bros. and Wet’n’Wild Water World along with Warner Roadshow Studios and Sea World Resort has stated that it is performing at a satisfactory level although the entertainment and media group's yearly profit has plunged by as much as 95.1 percent. Company’s net profit dropped 95.1 percent to $12.6 million in the year to June 30, despite income from continuing operations saw a rise of 7.8 percent to $1.4 billion. Shareholders are expected to get a final fully franked dividend of 6 cents per ordinary share and 9 cents per preference share.

Tax for normalised net operating profit went up 12.8 percent to $58.5 million in 2008/09, and operating earnings before interest, tax, depreciation and amortisation (EBITDA) gained 4.2 percent to $247.4 million. According to Village Roadshow, the company’s its 2007/08 net profit was impacted by as much as $181.6 million in profit from the partly divestment of its music division and film making. During the 2008/09 period, the bottom line was sent down by the non-recurring items which include $59.2 million in impairment charges relating to fresh acquisitions and $20.5 million in unrealised losses on foreign currency derivatives and interest rate.

Despite these derivatives are being commercially effective, but are mostly deemed ineffective as far as accounting purposes are concerned, the company claimed. John Kirby, the chairman of the company stated that the company is performing although the market is volatile. The management team is concentrating on free cash flow generation and managing margins to boost returns, Mr. Kirby added. According to the chief executive of Village Roadshow Graham Burke, specific steps were taken in order to attain margin gains as well as to reduce cost.