Profits up at Disneyland in Japan

TOKYO [JAPAN] — The operator of Japan's Disney amusement parks, Oriental Land Co. Ltd., said on Wednesday its first-half group operating profit rose 41.2 percent as attendance got a big splash from its new aqua-themed resort.

Oriental Land, which operates Tokyo Disneyland and the adjacent Tokyo DisneySea, said April-September group operating profit totaled 18.2 billion yen ($149.2 million) compared with a profit of 12.9 billion yen for the same period a year earlier.

The success of the Magic Kingdom in Japan stands in sharp contrast to the troubles facing other sectors of the leisure industry such as smaller amusement parks, golf courses and hotel chains, which have all fallen victim to weak consumer spending.

Oriental Land operates the parks and 46 Disney goods stores throughout Japan as part of a licensing agreement with Walt Disney Co that runs until 2022.

Helped by the opening of the immensely popular Tokyo DisneySea in September 2001, consolidated revenues rose 40.6 percent to 160.39 billion yen in the first half.

On a net basis, profit jumped 387 percent to 9.1 billion yen during April-September. In the same period last year the company booked a hefty one-off loss from development costs related to the opening of Tokyo DisneySea.

For the full year to March, Oriental Land raised its profit estimates slightly. It now expects a net profit of 17.7 billion yen for 2002/03 versus a May estimate of 16.9 billion.

The company reaffirmed its earlier forecast that its two parks, located on the outskirts of Tokyo, would attract 25.5 million visitors this business year -- equivalent to one-fifth of Japan's population.

Entry into either park costs 5,500 yen ($45), with most visitors spending almost twice as much on food, drinks and souvenirs. Per-customer spending within the parks averaged 9,580 yen in the first half, up 2.5 percent from a year earlier.

Still, the company remained cautious.

"The state of the economy and consumer spending are very bad, and we cannot expect to escape the impact of that completely," said Kazuo Kato, a senior managing director at Oriental Land. Oriental Land, which is 15 percent owned by Japan's top real estate developer Mitsui Fudosan Co. Ltd., also operates a luxury hotel on the grounds of DisneySea called the MiraCosta.

Oriental Land built DisneySea to appeal to a more adult audience, even allowing alcohol to be sold on site. Disneyland appeals more to children with its emphasis on rides and cuddly characters.

Tokyo Disneyland and DisneySea drew 11.96 million visitors from April to September, but the figures were a little weaker than expectations, hurt by a prolonged summer heat wave and typhoons.

"It is good news they were able to overcome some inclement weather in the first half and attendance will get better as the weather becomes cooler," said Masaaki Kitami, analyst at Daiwa Institute of Research.

"These results are very positive."

The Japan Disney parks received a boost from a series of scandals that hurt attendance at a rival park, Universal Studios Japan, partly owned by troubled French media group Vivendi and the western city of Osaka, where it is located.

Shares in Oriental Land closed up 2.21 percent at 7,400 yen before the earnings announcement, compared to a 0.18 percent rise in the Nikkei 225 average.

The issue, which is the third-largest by market capitalization in Tokyo's services sub-index, has fallen about 20 percent this year to date.

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