Titlis: Very Good Numbers Until Lockdown
Titlis has reported on their season. they say:
From November 2019 to mid-March 2020, 454,687 guests visited the TITLIS. Despite the slump in international markets from January, this is an increase of almost 1% compared to the very good previous year. Due to the prescribed lockdown as of mid-March 2020, we had to close the winter half-year that lasted until the end of April with this number of visitors, which corresponds to a decrease of 173,731 first-time entries or 27.7%.
At CHF 27.6 million, operating income was 23.4% below the previous year. Thanks to the measures initiated immediately, operating expenses were reduced by 18.8% to CHF 21.0 million. The result was an EBITDA of CHF 6.6 million compared to CHF 10.1 million in the previous year.
WINTER HALF-YEAR NOVEMBER 1, 2019 - APRIL 30, 2020
Snow sports:
The start of the winter season was encouraging. Despite extremely little snow, the slope conditions were very good thanks to technical snowmaking. The wonderful weather and the conveniently located public holidays led to record figures for Christmas and New Year. The winter offer became even more attractive with the opening of the Engstlen chairlift in December. At the end of January, first-time admission and sales were more than 10% higher than in the previous year. Unfortunately, the lockdown by the Federal Council on Saturday, March 14, brought the winter season to an unpredictable, abrupt end.
Group travelers:
Up until January the group business was at the previous year's level and the signals from the overseas markets made us look positively into the future at the beginning of the year. On January 24, the Chinese authorities banned package tours due to the Corona virus, which was equivalent to a travel ban. In the following weeks, the international travel market from all countries collapsed.
Individual travelers:
Although the number of foreign individual guests decreased from the end of January, we were able to welcome as many individual travelers as in the previous year until mid-March. The encouraging trend in this segment with a steady increase continued in winter 2019/20.
Costs:
The official closure in mid-March not only had a direct impact on earnings, but also on operating costs. In order to keep the impact on the result as low as possible, the plant was shut down immediately after the lockdown and work started on the end of the winter season. This new measure was necessary for us to relieve the cost side promptly. At the same time, short-time work was requested for the staff. Then there were still costs for the safety-related maintenance work and revisions of the railway facilities. The postponement of this revision work enables us to offer a continuous rail service well into the coming winter. All of these measures resulted in operating costs being reduced by 18.8%.
The EBITDA (earnings before interest, taxes, depreciation and amortization) amounts to CHF 6.6 million and achieves an EBITDA margin of 23.8%. Given that we lost 45 high-revenue days, this is a satisfactory margin.
Around CHF 10.3 million was invested in property, plant and equipment in the reporting period. The main investments were:
- Renovation of Hotel Terrace CHF 2.9 million
- Engstlen chairlift CHF 2.0 million
- Snow groomer CHF 1.6 million
- Project TITLIS 3020 CHF 1.8 million
PROJECT «TITLIS 3020»
The planning work of the four sub-projects of the “TITLIS 3020” project will continue in an adjusted manner. On March 5, 2020, the cantons of Obwalden and Bern as well as the local communities of Engelberg and Innertkirchen were used to clean up the border on Klein-Titlis. This means that the TITLIS 3020 project (tower and mountain station) can be implemented entirely on the territory of the canton of Obwalden.
From April 30 to June 2, 2020, the public circulation took place coordinated across all procedures (spatial planning and building permits) and sub-projects. Objections have been received from four environmental protection organizations. The first positive negotiations with the parties took place in mid-June to reach bilateral agreements. Fortunately, no objections were received from the population in Engelberg. In the second half of 2020, the municipalities of Engelberg and Wolfenschiessen will be voting on the zoning changes.
OUTLOOK SUMMER 2020
After almost 3 months of officially ordered interruption, we were allowed to resume rail operations on June 6th. As a result, we lost two months with strong sales. The international guests, individual travelers and group travelers, will mostly be absent this summer. Although we expect more Swiss guests, compensation with guests from Switzerland will not be possible. For these reasons, we anticipate a substantial drop in sales and profits for the 2020 summer season compared to the previous year.
EXPECTATIONS WINTER 2020/21
The expectations for winter 2020/21 are based on the assumption that the situation regarding corona will calm down and that there will be no second corona wave in winter 2020/21. In the snow sports segment we were and will be able to consolidate our market position with our investments in the railways and snowmaking. That is why we are optimistic about the coming winter in the snow sports segment.
The proportion of international guests of individual travelers and group travelers is around 20% in the winter half-year. Our overseas target markets are likely to recover only slowly. We assume that international guests will occasionally visit our TITLIS more frequently over Christmas / New Year and in March and April.
Due to the positive outlook in snow sports and the gradual return of international guests, we expect a winter half year at the level of the current year.
