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Disney weighed down by the harsh reality of the pandemic

2020-05-06T08:09:31.155Z


The entertainment empire estimates at 1.4 billion dollars the negative impact of the health and economic crisis on its activities.


Amusement parks and closed cinemas, delayed film releases, canceled sports competitions: the heavy price paid by Disney in times of pandemic reveals the importance of in-person activities for the brand, despite the success of its Disney + platform.

Read also: Disney will test its reopening strategy in Shanghai

The entertainment empire estimates the negative impact of the health and economic crisis on its activities at $ 1.4 billion, including $ 1 billion linked to amusement parks and cruises alone, according to its quarterly results release. published Tuesday.

" We are facing widespread disruption ," said Bob Chapek, the group's boss, during a conference call to analysts.

Adjusted earnings per share (the preferred indicator for investors) plunged 63% in one year to 0.6 dollars, despite a turnover of 18 billion from January to March 2020, up 21%.

Sign of a potential thinning in Asia, the group announced its intention to reopen the Disneyland of Shanghai on May 11, to a limited number of visitors with dated tickets, to avoid queues and disappointments.

The park will welcome up to 24,000 people a day in a few weeks (instead of 80,000 usually), but they will have to wear masks and their temperature will be measured at the entrance.

The “ parks, experiences and products ” activity, the group's second largest after television channels, saw operating profit drop 58% to $ 639 million. It harvested 10% less revenue than a year ago (5.5 billion).

Crowd bath

In mid-April, the Enchanted Kingdom had decided to put in place measures of technical unemployment, to save on salary costs.

Disney executives don't know when they can reopen other parks, merchandise stores and other tourism spots, from cruises to resorts. They also had to postpone the release dates of long-awaited films, like Mulan (Disney), Black Widow (Marvel) or Soul (Pixar).

The title of the company lost 2.74% in electronic trading after the close of the New York Stock Exchange. " The Covid-19 pandemic transformed certain Disney forces into vulnerabilities, " analyzes Ross Benes of eMarketer.

Cinema trips and amusement parks, long at the center of the profit machine, lose money in the short term and the path to recovery is uncertain in the absence of new treatments or vaccines that would reassure the public on the relevance of going for a crowd . " The American group is also suffering from the cancellation of sporting events, which generate audience and advertising revenue on its channels and platforms (ESPN, ESPN + and ABC).

Bob Chapek nevertheless welcomed the success of the documentary The Last Dance, on Michael Jordan and the Chicago Bulls, broadcast in 10 episodes on ESPN.

Lonely Streaming

Disney can also rejoice in the success of Disney +, its streaming platform launched in the fall in North America and Australia, in particular, then deployed in several European countries in March. In this case, the pandemic and the " Great Containment " worked in favor of Disney.

Its huge catalog of very popular titles, its original productions (including " The Mandalorian ", which takes place in the Star Wars universe) and its reduced price have allowed it to conquer many subscribers - it has 54.5 million at this Stadium. We have exceeded our most optimistic forecasts ,” enthuses Bob Chapek. Direct to the consumer ” activities now represent more than $ 4 billion in quarterly sales, compared to $ 1 billion a year ago.

But the activity remains deficit for the moment, with an operational loss of 812 million dollars, because of the important investments made for the launch on a large scale.

Read also: Disney + enters the video streaming arena

" Disney + has quickly amassed an impressive number of subscribers, but its impact on the group in general remains limited as long as cinemas and parks remain closed, " comments Ross Benes. Because the streaming service, like many other Disney products, only really generates significant revenue through synergies with the company's other offerings. "

Source: lefigaro

All business articles on 2020-05-06

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