SeaWorld announces cost-cutting strategy after 33% decline in profits

Aquatic theme park company, which has been struggling since the 2013 documentary Blackfish, reported third-quarter income fell from $98m to $66m

SeaWorld announced an aggressive cost-cutting strategy on Tuesday as the controversial aquatic theme park company reported a further 33% decline in profits.

The company, which has been struggling to win back customers since the 2013 documentary Blackfish detailed claims of mistreatment of orca whales and other animals, reported that its third quarter income had fallen from $98m to $66m.

Chief executive Joe Manby warned investors to expect annual profits to come in at between $310-340m. It is the third time the company has cut its earnings before interest, taxes, depreciation and amortization (EBITDA) target this year. In 2013 before celebrities including Harry Styles and Matt Damon sparked a Blackfish-inspired SeaWorld boycott the company made EBITDA of $439m.

In order to placate investors, angry at the company for suspending future dividend payments last month, Manby said he would aggressively cut $65m of fresh costs in order to try and shore up profits. Revenue in the quarter fell 2.3% to $485m and attendance was down 0.4% to 8.3m.

Manby said SeaWorld had begun executing a comprehensive cost optimization program on top an already announced cost-cutting drive. He said the company was delivering tangible results on the fundamental repositioning of our brand from animal entertainment to experiences that matter.

Last year, <a href=”https://www.theguardian.com/us-news/2015/nov/09/seaworld-end-orca-whale-shows-san-diego” data-link-name=”in” body link” class=”u-underline”>Manby bowed to pressure and vowed to phase out the theatrical killer whale experience at its San Diego park, which has been worst hit by the public boycott, by the end of 2016. The Californian Shamu show in which whales dive, jump and splash guests to the demands of their trainers is being replaced with an all new orca experience focused on the natural environment.

We are listening to our guests, evolving as a company, we are always changing, Manby said as he unveiled the new corporate strategy in November. In 2017 we will launch an all-new orca experience focused on natural environment [of whales]. 2016 will be the last year of our theatrical killer whale experience in San Diego.

The company went further in its efforts to win public opinion by ending the captive breeding of orca whales, after years of pressure from animal rights activists. By making this the last generation of orcas in our care and reimagining how guests will experience these beautiful animals, we are fulfilling our mission of providing visitors to our parks with experiences that matter, Manby said in March.

However, the company still has almost 30 killer whales, including one who is pregnant. The whales can live for up to 60 years.

Peta, the main animal rights charity campaigning against SeaWorld, said the company was fighting a losing battle to keep its orca prisons in business.

Instead of making real changes, SeaWorld is adding meaningless cosmetic decorations to its stadiums, continuing to force orcas to jump and splash for a reward of dead fish, and painfully inseminating dolphin mothers, Tracy Reiman, Petas executive vice-president, said. SeaWorld could turn things around by sending these animals to sea sanctuaries something that crowds everywhere would cheer.

SeaWorlds shares, which hit an all time low of $12 last month, rose 3.5% to $14.70 on Tuesday as investors welcomed the cost-cutting drive. The shares were worth as much as $39 in 2013.

Read more: https://www.theguardian.com/us-news/2016/nov/08/seaworld-cost-cutting-strategy-profit-decline-blackfish

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