Wonderla Holidays Ltd Concall Summary Q3FY17

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Financial Highlights

Wonderla Q3FY17 Financials
Wonderla Q3FY17 Revenue Breakup
Wonderla Q3FY17 Revenue Breakup
  • The revenue growth stood at 9% at 70.09 Crore driven by 6% growth in average revenue per visitor and 32% increase in footfall
  • Bengaluru Park 
    • 4% increase in average-ticket revenue
    • 39% increase in average not-ticket revenue
    • And 1.5% increase in footfalls
    • Bengalurur park is at PAT level
  • Kochi Park witnessed:
    • 3% increase in average-ticket revenue
    • 8% increase in average not-ticket revenue
    • And 3% increase in footfalls
    • The park is at PAT level breakeven
  • Hyderabad Park witnessed:
    • About 0.5 million footfalls in the nine months
    • the last quarter had about 1.7 lakh visitors
    • Hyderabad park is at EBITDA level breakeven
    •  At Hyderabad, the company is paying 15% service tax and 20%  entertainment tax
  • Decline in EBITDA and PAT
    • In good times Bengaluru margin was about 45%, Cochin park operating margin was growing from 40% to 45% and Hyderabad expected operating margin is 30% 
    • EBITDA declined by 26.7% to Rs 13.13 crore
    • EBITDA margin decreased from 39% from to 19% in 3Q.
    • Increase in operating cost from due to higher marketing and advertising expenses for Hyderabad
    • Increase in provisions of roughly 10.13 crore on account of taxes and levies
    • PAT declined by 66% YOY to 4.1% and decrease in the margin to 24.3% to 6% Q3FY17
  • Footfalls
    • In Cochin the company saw a growth of roughly 3% in footfalls and in Bengaluru the company saw a growth of roughly 1.5% and also Hyderabad being a new park
    • Had a pretty good quarter and as a result the topline has grown by roughly 39% and while footfalls saw healthy growth
    • 40% to 50% visitors are repeat visitors for both Cochin and Bengaluru

Impact of Demonetization

  • 2 weeks of retail footfall lost due to demonetization
  • A drop on footfalls was experienced due to the price factors
  • It was mainly seen on the second half of 2016
  • The capacity for each park is from 5,000 to 6,000 visitors per day and right now the run rate is around 3,000 to 4,000

Marketing and Ad Spends

  • Marketing spends will be up rightly 50% from last year
  • The growth in ARPU is 4% for 3Q versus the nine month it is around 7% is dependable on schools and college footfalls
  • Christmas numbers alone just for those 10 to 12 days, are significantly higher than last year in all three parks
  • Video and online mainstream channels though expensive, helped a lot
  • Targeted heavily for schools and colleges because this being the first year which need to be marketing a little more to the schools and colleges as there could be potential player available
  • Marketing team spending more budgets on 3Q and less on 4Q
  • ARPU has gone down for both the parks largely in this quarter and growth also decelerated versus last year
  • Targeting 4% to 5% growth in footfalls for the mature parks
  • Planning to increase prices between 5% - 8 % in the next financial year
  • Technically increase the ad spends by roughly 10% annually

Future expectations

  • Average ticket realization is Rs600 or Rs700
  • Expecting 7 lakh footfalls for Hyderabad 
  • Downward revised that to about between 6 and 6.5 lakh visitors for this first year
  • The next quarter also there will be a slightly higher provisioning than Rs 4-5 crore
  •  Targeting 4% to 5% growth in footfalls for the mature parks as 5%-6% growth is seen in Bengaluru and Kochi
  •  Planning price increase between 5% and 8% than that of 3% - 4% last year
  • Increasing ticket prices in the range of 5% to 8% 
  • Were originally expecting and at this point the company will probably be short of the 700,000 footfall target that the company had
  • Next quarter will have higher provisioning, 4 to 5 crore per quarter

Future Growth Strategy

  • New Amusement Parks
    • The company is currently in process of acquiring land in Chennai as well as identifying potential cpportunities for setting up new parks in other key geographies
    • MOU of 3 years has been signed for the Chennai Park
  • Improvising existing parks
    • Evaluate customer preferences to innovate attractions based on popular concepts
    • Develop the undeveloped land at existing parks to increase operational capacity
  • Enhanced Visitor Experience 
    • Wonderla Resort enables visitors to stay longer at the park and increases spend per head
    • Enhance visitor experience at other parks by integrating them with resorts
  • Expand In-house ride design
    • Introduce new rides and attractions based on customer preferences and research done by visiting parks in other parts of the world
    • Continue to invest in new manufacturing facilities at upcoming parks
  • Innovative marketing initiatives
    • Bolster revenues from entry tickets by offering value-added services
    • Introduce character and theme based attractions and promote this through marketing initiatives , ad campaigns using media as well as tour operators