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PARADISE ISLAND, The Bahamas - May 27, 2003 -- Kerzner International
Limited (NYSE:KZL):
The expansion would include the following components:
"We are very excited about this next stage of Atlantis's development and growth," said Sol Kerzner, Chairman and Chief Executive Officer of Kerzner International. "This is an ambitious project and we are convinced that to remain successful we must continue to add new and exciting attractions. We believe that success is built upon keeping our product at the leading edge of the resort industry, delivering world-class service and continuing to promote the resort with an aggressive and innovative marketing plan. We have also operated Atlantis successfully during some trying times. Last year, while most others in our industry were suffering, we were able to maintain our room rates and occupancies." Butch Kerzner, President of Kerzner International commented, "Atlantis has shown remarkable resilience during a difficult travel market. While many other resorts and hotels have experienced a difficult period, our Paradise Island operations have gone from strength to strength. During 2002, our Paradise Island business achieved some very significant milestones that included surpassing the $500 million gross revenue threshold for the first time. Our Paradise Island operations achieved record EBITDA in 2002, posting increases of 11% and 20% ahead of levels achieved during 2000 and 2001, respectively. The robustness of the business lies in the uniqueness of our product offering, strength of the Atlantis brand, and diversity of revenue streams. This new phase of expansion will leverage off all our work and investment over the last ten years and will add outstanding new attractions, keeping the destination new and exciting." Demand patterns have been strong for Atlantis. In the first quarter of 2003, the Company managed to maintain revenue per available room (RevPAR) with the same period last year, despite a weaker travel market arising from the effects of the war in Iraq. In the first quarter of 2003, Atlantis achieved a RevPAR of $239 as compared to $240 in the same period last year. In 2002, Atlantis achieved a RevPAR of $198 as compared to $194 and $201 in 2001 and 2000, respectively. "Booking patterns have now returned to normal levels following the end of this war," said Butch Kerzner. "The Company currently anticipates maintaining a flat RevPAR in the second quarter of 2003. This proposed expansion will position Atlantis well when demand patterns in the travel industry improve." As part of the new Heads of Agreement and consistent with its commitments to the Bahamian public, Government has provided certain undertakings that include efforts to improve Nassau International Airport and the roadway systems. Further, it will operate fire and ambulance facilities on Paradise Island; and, on an as needed basis, expand the facilities at The Bahamas Electricity Corporation and The Bahamas Telecommunications Corporation. The agreement with Government also provides for various investment incentives including:
Construction of Marina Village and Ocean Club Villas will commence by the end of this year with an expected completion by the end of 2004. The Harborside expansion will commence by early 2004 and is expected to be completed by 2005. These projects are expected to cost approximately $100 million. The largest portion of the expansion, of approximately $500 million, covering the new 1,200-room hotel, increase in the existing water based attractions, additional convention space and new golf course is expected to commence in late 2004 and be completed by Christmas 2006. The Company currently anticipates funding this development through free cash flow and existing debt capacity. Butch Kerzner continued, "We have a very strong balance sheet. While many in our industry are highly leveraged, we have been disciplined in using our free cash flow to repay debt. We now have the financial strength and capacity to move forward with an undertaking the size of Phase III." Sol Kerzner added, "This expansion project will bring our investment in The Bahamas to $1.7 billion, which reflects our continued confidence in the Government of The Bahamas and our commitment to the hard-working people of this country. I am quite pleased to announce that this project is expected to add at least 2,000 jobs for Bahamians at our properties and will bring many visitors to The Bahamas." About the Company
This press release contains forward-looking statements, which are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.
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The Bahamas 242/363-6016 www.kerzner.com |
Also See: | Kerzner Rebrands its Luxury Resorts 'One&Only' / Dec 2002 |
Federal Prosecutors Investigating Possible Kickback Scheme in the $1 billion Expansion of the Mohegan Sun / May 2003 |