By Andrew Mitchell
Vancouver-based Intrawest Corporation, the parent company of
Whistler-Blackcomb, summed up its fiscal year this week with reported profits
of $115.2 million U.S. for the year ending June 30.
While that kind of news usually provides a boost in share
price, traders greeted the year-end report with a collective yawn. Most expect
the purchase of Intrawest by Fortress Investment Group of New York for $2.8
billion U.S. to be approved at Intrawest’s Oct. 17 shareholder meeting, after
which point the company will no longer be publicly traded.
The profits reflect gains made in several areas, including the
sale of real estate and operations by Intrawest.
“Our fiscal 2006 performance was highlighted by the sale of a
majority of our interests in both our real estate and mountain operations at
Mammoth Mountain, California, which demonstrates our proven ability to create
value through acquiring and developing world-class destination resort
properties,” said Joe Houssian, chairman and chief executive officer at
The sale of Mammoth back to its parent company generated an
after tax gain of $61.3 million for the company. Intrawest still retains a
minority interest in the resort.
“We also made considerable progress during the year in
strengthening our leadership position in the destination resort and adventure
travel industries through the continued expansion of award-winning Abercrombie
& Kent, as well as extending our business reach into Europe.”
Whistler-Blackcomb and other resort operations also contributed
to the bottom line. Visits to Intrawest’s nine North American resorts,
including Whistler-Blackcomb and Panorama, were up six per cent to 6.69 million
skier visits, although numbers at eastern resorts were down about three per
cent — partly due to a strike by 1,500 unionized workers at Mont
Tremblant that slowed traffic to the resort in the early Christmas holiday
season, and partly due to conditions. Overall, revenues from mountain
operations were up $21.3 million over the previous year.
Whistler-Blackcomb skier visits were up 39 per cent and
revenues up 33 per cent in 2005-06 compared to the previous season. The 2004-05
winter is considered to be one of the resorts’ worst years with the lowest
snowpack in about 40 years through January and February, although things turned
around in March.
However, the report confirms that the increase was largely
regional, accounting for 42 per cent of room nights, while the long-haul U.S.
market decreased 32 per cent. The end of year report attributes the drop to the
higher Canadian dollar, higher cost flights to Vancouver, excellent conditions
at western U.S. resorts, and poor weather in Whistler from late November until
Christmas. Things turned around on Boxing Day, and January was the snowiest
month on record for Whistler.
Copper Mountain and Winter Park in Colorado benefited from
their best snow conditions in several years, with numbers up eight per cent
over the previous year.
Helicopter operations also reported strong results, with
revenues up $2.7 million. That bodes well for Whistler-Blackcomb’s recent
purchase of Whistler Heli-Skiing.
Fiscal 2006 Highlights:
• Intrawest earned $1.61 billion in revenue
• Resort and travel operation revenue increased 16 per
cent to $936.1 million, led be Abercrombie & Kent adventure travel.
A&K’s own revenues were up 18 per cent over the previous year to $294.9
• Real estate presales revenue of $534 million was reported in
December of 2005, a record month for Intrawest.
• The sale of Lot Three Ka-anapali, a 26-acre beachfront
property in Maui, netted a pre-tax profit of $25.4 million.
• Overall, Intrawest reported $55.3 million in income from
operations this past fiscal year, more than double the $24.1 million reported
the previous year.
• Intrawest expanded its presence in Europe by adding three
village development locations in France and one in Switzerland.
• Based on revenues and earnings, Intrawest will pay a dividend of $0.08 per share on Oct. 2.