Euro Disney, the French theme park operator suffering from a heavy debt load and a tourist downturn, reported broadly flat first-quarter sales on Thursday following two consecutive quarters of decline.
The operator of Disneyland Paris, Europe's biggest tourist attraction, said sales in the three months to the end of December totalled 264 million euros ($334 million), up one percent from 262 million in the prior-year period.
"I am pleased with the rise in our turnover in the first quarter, particularly after the fall we experienced in the second half of 2003," Euro Disney Chairman Andre Lacroix said in a statement with the figures.
Revenue from its core theme park business edged up two percent to 131 million euros, reflecting a rise in spending per visitor even though the number of visitors was stable, it said.
Sales at its hotels and at Disney Village dipped one percent to 102.7 million as other companies opened hotels at Disneyland Paris, eating into occupancy at Euro Disney's own hotels.
Euro Disney's volatile shares had jumped 11 percent to 0.51 euro by 1047 GMT as investors welcomed the news of a recovery from last year's slump in visitors.
Still, one analyst cautioned that the recovery in visitor numbers was not enough for the debt-laden amusement park operator to restore cash flow and advance its negotiations with creditors.
"They need attendance to take off as quickly as possible. That is what matters for Euro Disney," said Virginie Blin, leisure analyst at brokerage Fideuram Wargny.
The company said talks were continuing with its lenders after announcing in November it had won a six-month moratorium on its debt payments that expires in March this year.
Financial costs caused its net loss to balloon to 56 million euros in fiscal 2002-2003.
Euro Disney is 39 percent owned by the Walt Disney Co. The company said it had available cash and short-term deposits worth 26.1 million euros at the end of December 2003, and had used 110.0 million euros out of credit lines from Walt Disney worth up to 212.7 million.
Heavily indebted since its inception, the company restructured its finances in 1994. But it has been caught in the pincers of higher costs stemming from the construction of a second theme park and a sector-wide downturn in tourism.
In March 2002, Euro Disney opened a second theme park, the Walt Disney Studios, beside its original Magic Kingdom park, but visitor numbers have been disappointing.
The company, however, expects demand to revive in the second half of its 2003-2004 fiscal year, helped by an aggressive marketing campaign within the eurozone.
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