The soft-launch will happen on April 2, 2016, he said, while a full-fledged launch will have to wait till the third week of April.
Chittilappilly projects first-year revenues to be around Rs 65 crore. He puts the expected footfalls to be around 7 lakh visitors, which will grow to 10 lakh by the fourth year.
Chittilappilly has also indicated that a fourth park is underway. The company will also be opening a park in Chennai by 2018 with a capital expenditure of Rs 300 crore, he said.
In order to meet expenses better, there will be a slight hike in the price of tickets of Bangalore Wonderla, added Chittilappilly.
Below is the transcript of Arun K Chittilappilly’s interview with CNBC-TV18’s Nigel D’Souza and Reema Tendulkar.
Nigel: You have announced the launch of the Hyderabad park. Could you give us some details, like what are the expected footfalls; are you expecting an optimum capacity; how exactly would it look like? Also, what is the average spend per visitor and any other details?
A: We are very excited to launch the Hyderabad park on time. We will be doing the soft launch on April 2, 2016 and a full-fledged launch by the third week. So, that is what we have planned.
Hyderabad has a lot of firsts. It will have India’s first reversing roller coaster which is almost 40 meters high and will have 6 inversions. We have managed to get fantastic machine. The Hyderabad park will also have a flying theatre which will be a nice addition to the entertainment landscape of Hyderabad.
Revenue wise we are projecting around Rs 65 crore in our first year, which is FY17. Also, the expected footfall is about 7 lakh visitors in our first year and that should grow to about 10 lakh by year four.
Reema: How many years will it take for you to break-even on the Hyderabad park?
A: Hyderabad park will be operationally profitable from year one and at profit after tax (PAT) level it will be profitable from year four.
Reema: How will year one, year two and year three will hurt the net profit margins of the company till you make it profitable in year four?
A: Because of the depreciation cost there will be a drop in our net profit margin percentage, but due to of revenue growth I don’t think there will be a drop in net profit as much, it might be flattish for a couple of years and then it will start rising again.
Reema: So, net profit growth will be flat in the coming two to three years?
A: Yes, two years max. After that it should grow.
Nigel: The fourth park that is slated to be opened is in Chennai. What is the development on that? You had told us in the past that the land was acquired; you are likely to start construction in 2016 as well. What is the status update, post rains was there any impact over there?
A: No, we are projecting the Chennai park to open in 2018 and there is no change in the plan. We are just completing the land acquisition as we speak, and waiting for approvals and other formalities.
Nigel: But construction is going to start from next month itself. What are the capital expenditure (capex) plans over there?
A: Capex for Chennai will be roughly at Rs 300 crore which will be staggered over a period of two years from now.
Reema: We are at the start of a new year, so would you consider increasing ticket prices for FY17?
A: For our existing pass, we are looking at a small ticket price hike, roughly around 4-5%. We are doing a lower ticket price hike this year because last year there was service tax impact and there was a huge increase in the ticket pricing. Also, our pricing for Hyderabad will mirror pricing with Bangalore ticket costs.
For entire interview, watch accompanying video.