A story about a loss at Whistler Blackcomb never goes unnoticed by the mainstream media. A lack of destination visits means the company has to delay plans for new infrastructure like moving the lift from Harmony Ridge to Crystal and building a whole new lift at the former.
Dave Brownlie encouraged by regional visits but company faces “headwinds” in destination market
By Jesse Ferreras
Whistler Blackcomb Holdings posted a $6.8 million loss for its third quarter ending June 30, a loss that its chief financial officer said was normal for that time of the year.
In a conference call Wednesday (August 10), Whistler Blackcomb president and chief operating officer Dave Brownlie and chief financial officer Kevin Smith remarked on the company’s third quarter results, covering the period from April 1 to June 30, 2011.
Smith said as part of his update that after deducting depreciation and amortization expenses, Whistler Blackcomb Holdings arrived at a net loss of $6.8 million for the quarter, results that he said were “typical operating results” for a third quarter.
Resort revenues decreased by one per cent to $31 million in the same quarter but also increased by 22 per cent to $186 million for the nine months ending June 30, compared to the period the previous year.
The effective ticket price (ETP), a measure of lift ticket sales divided by skier visits, decreased by 17 per cent to $36.79 in this quarter compared to 2010 but also increased by six per cent to $47.06 in the nine months compared to the same period the previous year.
“Overall we are pleased with our performance over the third quarter and for the 2010/2011 season,” Brownlie said on the conference call. “First we completed our IPO in November, second we have paid out our first three quarterly dividends, including on July 25, and finally we achieved record season passes and frequency card sales, which played a key role in returning visits to pre-Olympic levels surpassing the two million visit mark once again.”
Season pass and frequency (Edge) card sales, he said, saw a 28 per cent increase, generating $43.3 million in revenue. He called this an important accomplishment because it allowed Whistler Blackcomb Holdings to lock in revenue from “key regional customers.”
Brownlie also remarked that the company is facing “headwinds” in trying to attract visitors from destination markets such as the United States, Europe and Asia. Its ability to restore visitation to pre-Olympic levels came largely from regional markets, meaning areas such as Vancouver and the Lower Mainland – basically anyone who can drive to Whistler.
“We believe the change is a result of the economic environment, the strength of the Canadian dollar and the cost of air travel to Vancouver,” Brownlie said, adding that Whistler has nevertheless seen “resiliency” in visits from the United States and the Asia-Pacific region.
The conference call came as Whistler Blackcomb’s stock experienced record lows on the Toronto Stock Exchange (TSX).
Shares for Whistler Blackcomb Holdings traded at a 52-week low this week, the lowest value they have seen since being listed publicly in the fall. The company closed at $9.90 a share on Tuesday, down from $10.14 the previous day and $11 a week earlier.
The company dropped to $9.75, its lowest value since being listed, while trading on the market August 8.
The drop in value came as global markets plummeted in the wake of news about the Standard and Poor’s (S & P) rating agency downgrading the United States of America’s debt from AAA to AA+ for the first time in its history, a move that took it out of the club of countries with top-notch credit ratings.
The downgrade, however, was met with immediate blowback from the U.S. Treasury department, which claimed that S & P reduced the country’s credit rating after overestimating its debt by $2 trillion. S & P acknowledged the mistake but did not restore U.S. debt to AAA.