Fears Movie World, SeaWorld and Wet ‘n’ Wild are on the brink of collapse as theme park owner makes drastic cuts after being crippled by coronavirus
- Workers at Gold Coast theme parks have been advised to take leave
- Village Roadshow Ltd said there is ‘an escalation of disruption to businesses’
- They said the theme parks have seen a reduction in visitation from tourists
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Australia’s iconic Gold Coast theme parks are on the brink of collapse, with workers being told to take leave as they try stay afloat amid the coronavirus pandemic.
Village Roadshow Limited, which owns Movie World, Sea World and Wet ‘n’ Wild, issued a statement to the Australian Stock Exchange on Thursday morning saying there was ‘an escalation of disruption to businesses’.
‘The theme parks have continued to experience a reduction in visitation, particularly from the international tourist market,’ the statement read.
‘This along with weaker forward bookings and lower annual pass sales to the domestic market has made recent trading challenging, which is expected to continue.’
Meanwhile Ardent, the owner of Dreamworld, has seen its shares plummet to under 25cents, down from $1.60 at the end of January this year.
The theme parks have been hit hard by the government’s decision to ban all public gatherings of more than 500 people in a bid to curb the impact of coronavirus.
Workers at the Gold Coast theme parks have been advised to take leave as they prepare to close due to the coronavirus outbreak (Movie World pictured)
Village Roadshow Limited is implementing cost reduction strategies in an attempt to reduce the potential impact on the group’s earnings and cash flow.
The cost-saving initiatives include asking employees to take leave, slashing senior executives salaries and removing all bonuses.
There will also be a freeze on non-essential uncommitted capital expenditure, a freeze on non-essential international and domestic travel and a freeze on non-essential recruitment.
VRL CEO Clark Kirby said it was possible the theme parks may be closed for a period of time.
‘This would have a significant impact on the earnings during that period, the Company is working on contingency plans for this eventuality,’ he said.
‘As always the safety and well-being of our employees and patrons is our first priority, we will continue to follow operating guidelines provided by government and health authorities despite the adverse impact on the profitability of our business.’
Workers at the Gold Coast theme parks have been advised to take leave as they prepare to close due to the coronavirus outbreak
The group is implementing cost reduction strategies in an attempt to reduce the potential impact on the group’s earnings and cash flow
Mr Kirby said the cost-reduction measures are hoping to assist the group earnings and cashflow in the ‘challenging’ circumstances.
‘Most of our earnings are derived from the domestic market which should enable a swift recovery once this terrible pandemic has passed,’ he said.
The Australian share market has suffered since the outbreak of the coronavirus losing about $700 billion at its lowest point, though it has since recovered somewhat.
The Australian dollar is currently buying just 57 US cents – the lowest level in about 17 years.
ANZ economists have warned the economy could contract by as much as two per cent in the June quarter, risking a rise in the jobless rate to almost eight per cent from around five per cent now.
‘Workers in industries such as tourism, education and retail are already being laid off and this will only worsen under travel bans, cancellations of large events and social distancing,’ ANZ said in a research note to clients.
Finance Minister Mathias Cormann says the upcoming government economic package, which will follow $17.6 billion worth of support announced last week, will be ‘significant’.
The cost-saving initiatives include asking employees to take leave, senior executives salaries will be reduced and senior executives will not get any bonuses