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By Nick Antonovics
PARIS, April 27 (Reuters) - Theme park operator Euro Disney SCA EDLP.PA said on Friday its first-half net loss narrowed due to a rise in the number of visitors to Disneyland Paris and despite higher charges linked to its debts. The company, which is celebrating 15 years of the park east of the French capital, said the net loss in the six months to March 31 narrowed to 69.2 million euros ($94.21 million) from 83.6 million a year earlier.
Operating losses narrowed to 36.3 million euros from 60.9 million, while financial charges rose nearly 10 percent to 45.6 million euros.
“The results of the first semester are pleasing because they confirm what we want to believe, which is that we are making steps in the right direction to profitability although we know it is still a long road,” said Chief Financial Officer Ignace Lahoud.
“What’s pleasing for us is that we got these results even before kicking off our 15th anniversary,” he said, noting visitor numbers had risen 600,000 in the first half after a rise of 500,000 in its last fiscal year.
Euro Disney launched an anniversary parade and attractions on April 1, the start of its second half. In June it is due to open new rides based on the films Finding Nemo and Cars. A high-speed train link to eastern France is also due to open that month.
Lahoud said the company was pleased with visitor numbers in the first few days of April but noted the weather - the month is on track to be the hottest since records began - had been particularly favourable.
Euro Disney SCA results are weighed by the huge debts run up to develop the park. Contractual payments to lenders helped explain the rise in first-half financial charges, Lahoud said.
At March 31, total borrowing amounted to 1.993 billion euros compared with 1.941 billion on Sept. 30, the close of the company’s 2005/06 year. Equity fell to 312.7 million euros from 393.5 million.
Under a debt restructuring deal in 2005, Euro Disney has to meet certain operating targets. The company said: “Although no assurances can be given, the group currently believes it will meet its financial covenants in fiscal 2007.”
Lahoud said the group was not affected by rising European Central Bank interest rates, as 72 percent of its borrowings were fixed and the remaining floating portion was hedged.
But he declined to say if the company expected to break even at an operational level this year after it narrowed full-year operating losses in 2005/06 to 2 million euros.