Walt Disney Company has suffered $1 billion hit through the closure of theme parks and suspension of cruises due to the Covid-19 pandemic.

The total impact on the global entertainments giant in the first quarter of the year is estimated at as much as $1.4 billion.

US parks and resorts, cruise line and Disneyland Paris were forced to shut in mid-March, following the closure of parks and resorts in Asia earlier in the quarter.

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“As a result, volumes were negatively impacted in the quarter,” the company said. “We estimate the total impact of Covid-19 on segment operating income in the quarter was approximately $1 billion.

“Prior to the closure of our domestic parks and resorts, volumes and guest spending were higher compared to the prior-year quarter.”

The company added: “In total, we estimate that the Covid-19 impacts on our current quarter income from continuing operations before income taxes across all of our businesses was as much as $1.4 billion, inclusive of the impact at the Parks, Experiences and Products segment.”

Directors are to forgo payment of a cash dividend for the first half of the 2020 financial year to preserve $1.6 billion, “given the significant operational and financial disruption caused by Covid-19”.

The company added: “The board’s action is one of several measures the company has taken in the wake of the pandemic, including reducing capital spending, cutting salaries for senior management, and making the difficult decision to furlough employees.”

Chief executive Bob Chapek said: “While the Covid-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position.

“Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”

Quarterly revenues in the Parks, Experiences and Products division fell by 10% to $5.5 billion and operating income dropped 58% to $639 million.

“Costs for the quarter were higher compared to the prior-year quarter due to an increase at our domestic parks and experiences driven by expenses for new guest offerings, which included Star Wars: Galaxy’s Edge, the net cost of pay to employees who were not performing services as a result of actions taken in response to Covid-19, and inflation,” the company said.

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