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Wonderla Ltd: Excessive Rains Impact Topline Growth - Views on News from Equitymaster

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  • Nov 29, 2017 - Wonderla Ltd: Excessive Rains Impact Topline Growth

Wonderla Ltd: Excessive Rains Impact Topline Growth
Nov 29, 2017

Wonderla Ltd declared results for the quarter ended September 2017. The company reported a marginal revenue growth of 1.3% YoY, while the profits declined by 37% YoY.

Performance summary

    Bengaluru Park

  • The revenues from the Bengaluru park grew by 4.3% during the quarter. The growth was supported by an increase in non-ticket spending by the visitors. Non-ticket spending grew by 24.3% YoY led by an increase in spending on food and beverages and adoption of a compulsory dress code at the water park.
  • The footfalls dropped marginally by 1.5% YoY during the quarter. The drop was mainly on the back of excessive rainfall during Dussehra. Further, Bengaluru is known as an Information Technology (IT) hub. A slowdown in the IT sector, has also contributed to the reduction in footfalls in the Bengaluru park.
  • Bengaluru Resort

  • The revenues from the Wonderla Resort at their Bengaluru amusement park reduced by 7.4% YoY during the quarter. Lower occupancy mainly contributed to the reduction in revenues.
  • Occupancy reduced mainly on the back of a reduction in the corporate clients. Further, a rise in the average room rentals by 15.1% YoY to Rs 4,950 per night also contributed to a fall in the occupancy levels.
  • Kochi Park

  • The revenues from the Kochi park declined by 9.3% YoY during the quarter led by a decline in footfalls. Footfalls registered a decline of 18.9% mainly on the back of excessive rains during the Onam season. Further, a rise in the ticket prices taken during the preceding quarter too impacted the footfalls.
  • The non-ticket revenues per visitor grew by a massive 57.5% YoY to Rs 195 during the quarter.
  • Hyderabad Park

  • The revenues from the Hyderabad park grew by 23.9% YoY during the quarter led by an increase in footfalls. The footfalls grew by 20.3% YoY during the quarter.
  • The ticket prices shot up by 28.6% YoY in the first half of the current fiscal as compared to same period in the preceding fiscal. Hyderabad park got commissioned in 1QFY17, and to lure the customers the company had launched inaugural offers at cheap ticket prices. Hence, the rise in the ticket prices seems to be significant.

    Standalone financial performance
    (Rs m) 2QFY17 2QFY18 Change 1HFY17 1HFY18 Change
    Segment Revenue :            
    Amusement Parks 385 374 -2.9% 1,085 1,182 9.0%
    Resorts 24 22 -7.4% 59 54 -7.8%
    Others 78 98 24.5% 209 281 34.5%
    Total Revenues 488 494 1.3% 1,353 1,517 12.2%
    Expenditure 396 383 -3.3% 889 970 9.1%
    Operating profit (EBDITA) 92 111 21.1% 464 548 18.0%
    EBDITA margin (%) 18.8% 22.5%   34.3% 36.1%  
    Other income 27 18 -33.8% 66 49 -26.3%
    Depreciation 76.8 89.4 16.3% 148.7 169.4 13.9%
    Interest 2.4 3.3 33.3% 4.5 7.0 54.5%
    Profit before tax 39 36 -7.7% 377 420 11.4%
    Tax 2 13 577.4% 115 137 18.8%
    Effective tax rate 5% 35%   31% 33%  
    Profit after tax/(loss) 36.97 23.31 -37.0% 261 283 8.2%
    Net profit margin (%) 7.6% 4.7%   19.3% 18.6%  
    No. of shares (m)         56.5  
    Diluted earnings per share (Rs)*         6.2  
    Price to earnings ratio (x)         57  

    (*On a trailing 12-month basis & excluding exceptional Items)

  • The company had finalized the land for the Chennai park and it was expected to be operational by FY 20. However, because of certain matters pertaining to local body taxes, the project has been delayed by around six months. Further, the company is planning to raise a debt of Rs 150 crores for this plant.
  • The operating margins improved by 3.7% to 22.5% YoY during the quarter. The margins improved on account of strict checks on the operating overheads.
  • The net profits declined by 37% YoY during the quarter to Rs 23.3 million. The profits declined mainly on the back of higher depreciation and tax outgo.
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