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Whistler Blackcomb revenues up, destination visits down

Profits boosted by local and regional skiers

Whistler Blackcomb is reporting a profitable winter season in the wake of the Olympics; first quarter results released last week show.

In a news release issued on February 10, the company reports resort revenue of $46.8 million between October and December of 2010, a jump of 10.2 per cent over the same period in the previous year. Revenues were driven by increased skier visits and "increased effective ticket prices."

Although much of the news was encouraging for Whistler Blackcomb, President and Chief Operating Officer Dave Brownlie didn't mince words when he addressed where the corporation is falling short.

"As expected we are seeing a recovery in skier visits after the 2010 Olympic and Paralympic Winter Games and we expect a return to our historical levels with overall skier visits on track to exceed two million," he said in the news release.

"However, our destination skier visits have not recovered to pre-Olympic levels. Our challenge will be to repeat the success we have achieved with our local and regional campaigns in the international markets to help drive destination skier visits."

Factors impacting destination visits included good snow conditions at resorts throughout North America, a development that persuaded skiers and snowboarders to stay closer to home. Other factors keeping destination skiers from visiting Whistler Blackcomb included a slow global economic recovery and the "relative strength" of the Canadian dollar.

Whistler Blackcomb said it would work with partners including tour operators, hotels and Tourism Whistler to increase bookings and capitalize on awareness created by the Olympic Games.

The corporation is also planning changes to packaging and introducing more "aggressive" destination programs such as "kids ski free" in February and March, as well as extending a Discovery Whistler Days program and maintaining certain discounts through the balance of the season.

Company revenues are divided into two periods in the news release: October 1 to November 8, before the company went to a $300 million public offering, a period in which the company garnered $3,902,000 in revenue. The second period is from November 9 to December 31, after the company went public.

Whistler Blackcomb also posted net earnings of $5,942,000 in the same period after operating at a deficit of $8,525,000 from October 1 to November 8. The overall profit for the quarter is a jump over net earnings of $4,235,000 for the same period in 2009.

Resort segment operating profit excluding real estate was marked at $8.2 million for the entirety of the first quarter, increasing 7.8 per cent over a 2009 profit of $7.8 million due to increased skier visits and related activities, according to the news release.

Operating expenses for the company including resort segment operating expenses, general and administrative costs and others, were $45 million, an increase of 17.5 per cent over the same period in 2009. The increase in costs was driven partially by increases in operating expenses.

A Management's Discussion and Analysis report shows that Whistler Blackcomb's revenue is driven primarily by lift operations and business activities such as ski school, food and beverage, retail and rental operations. Lift tickets form the single biggest source of revenue for the company and that includes season passes.

Sales of season passes and frequency cards such as EDGE cards came up to 104,000 units and $34 million for the quarter, a jump of 23 per cent in units and 33 per cent in sales over the first quarter in 2009.

First quarter results also show the cost of taking the company public in order to allow it to trade on the Toronto Stock Exchange, which is in the midst of a merger with the London Stock Exchange.

It cost the company $18,930,000 to issue shares to the public, costs that included fees and commissions paid to underwriters such as Royal Bank of Canada, CIBC World Markets and BMO Capital Markets.