Leading Chinese Ski Resort Group Blames US Trade War For “Substantial Doubt” In Its Future
5th June 2019
Category : News
The Mountain China Resorts (Holding) Limited group, which publishes its results in Canadian Dollars, says its EBITDA Figures (earnings before interest, tax, depreciation and amortization – a measure of a company’s operating performance) were down from $0.68 million compared to $1.22 million last year.
“Major reason for the decrease in revenue was that since the second half of 2018, the Ski industry has been adversely affected by the overall economic downturn of China as a result of the macro-environment of trade war between China and the U.S., as well as a series of economic policies adopted by Chinese government to drop leverage rate. 2018-2019 winter operations were under negative influence of those macroeconomic environment,” a company statement on its results reads.
The Company reported a revenue decrease of 26% in first quarter of 2019 compared to 2018. It reported overall it generated revenues from resort operations of $4.04 million and a net loss of $0.12 million compared to $5.46 million and a net loss of $0.28 million in 2018 from continuing operations.
The figures come as skier numbers in China are reported to be soaring ahead of the country staging the Beijing Winter Olympics in 2022. Mountain China Resorts did not say what its skier numbers were in its statement.
“The Company has an accumulated deficit and a working capital deficiency which cast a substantial doubt on the Company’s ability to continue as a going concern. The Company’s ability to meet its obligations as they fall due and to continue to operate as a going concern is dependent on further financing and ultimately, the attainment of profitable operations,” the statement continued.
MCR describes itself as “the premier developer of four-season destination ski resorts in China” and says it is transforming existing China ski properties “…into world-class, four seasons luxury mountain resorts.”
In February 2009, the Company’s Sun Mountain Yabuli Resort was awarded Best Resort Makeover in Asia by TIME Magazine. Yabuli is also the permanent home of the China Entrepreneur’s Forum the leading and most influential community of China’s most distinguished and successful entrepreneurs and business leaders with over 5,000 members from across a variety of key industries.
Sun Mountain has been operated by Club Med, now also Chinese owned, however this relationship is due to expire at the end of next season and MCR say they are already negotiating an extension of the relationship.