The company has stated that a significant adverse impact is expected in the Cinema Exhibition division due to major studios rescheduling a number of titles including Peter Rabbit 2: The Runaway, Mulan, Bond: No Time To Die, Fast & Furious F9 and A Quiet Place Part II to the 2021 financial year.
The Theme Parks division has reported challenges as well with a reduction in visitation, particularly from the international tourist market combined with weaker forward bookings and lower annual pass sales to the domestic market.
Due to the fluid nature of the COVID-19 pandemic the company has stated that it is not possible to provide meaningful guidance on the group’s earnings at this time.
The company has also announced cost reduction strategies to reduce the potential impact on the group’s earnings and cash flows and are in discussions with Industry Groups and Government at Federal, State and Local levels to develop action plans and support
Cost saving initiatives include:
• Senior executives salaries will be reduced immediately
• Senior executive bonuses will be zero for FY20
• Freeze on all non-essential uncommitted capital expenditure
• Freeze on all non-essential international and domestic travel
• Freeze on all non-essential recruitment, consulting and advisory work
• Asking all employees to take leave to reduce employee costs
VRL CEO Clark Kirby said: “Based on international precedent, it is possible that cinemas and/or theme parks may be closed in Australia for a period of time, which would have a significant adverse impact on VRL’s earnings during that period. The Company is working on contingency plans for this eventuality.
“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. The cost reduction measures we are implementing will assist our group earnings and cashflows in challenging circumstances. Most of our earnings are derived from the domestic market which should enable a swift recovery once this terrible pandemic has passed.”