Thanks to "a massive cost-cutting programme and the benefit of extensive insurance coverage," DEAG has managers to keep EBIDTA losses at bay.
The EBITDA stood at minus €0.3 million (minus $0.36 million)in the first half year with minus €1.5 million in the second quarter.
It's a demonstration of DEAG's "ability to withstand the effects of the COVID-19 crisis and the related slump in sales in its results for the first half of 2020," according to the company's latest earnings statement.
In comparison, EBITDA stood at €3.1 million at the half-year mark in 2019, and at €2.1 million after the first three months of the previous year.
This year's second quarter was particularly badly affected by the government imposed event bans, which brought live entertainment to a standstill.
Sales in the first half of the year amounted to €31.7 million ($37.7 million), down from €63.9 million ($76 million) at this point in time last year; and to €5.6 million ($6.7 million) in the second quarter, down from €8.4 million ($10 million).
"Significant cost savings, of more than 30 percent compared to the first quarter of 2020, as well as DEAG’s extensive insurance coverage were the basis for the solid result," the earnings statement reads.
The advantage of having insurance that includes a pandemic in its force majeure policy can hardly be overstated: "In recent months, DEAG has already received €9 million [$10.7 million] in insurance benefits, with another €5.1 million ($6 million) in the settlement process. The insurance coverage will continue to apply without restriction for events that have already been postponed," the statement continues.
DEAG hasn't been idle in these past months, when public events were severely restricted. The company promoted drive in events, including concerts and cinema at BW-Bank Kulturwasen in Stuttgart, which got extended until the end of September, when it is projected to have drawn around 100,000 visitors. Stage Drive in Frankfurt is also promoted by DEAG.
Preparations for DEAG's Christmas Garden event format are in full swing at eleven locations, according to the earnings statement.
As DEAG founder and CEO Peter Schwenkow toldPollstar
in arecent interview
, this Christmas event format, which launched in 2016, is "COVID-19-compatible."
"DEAG assumes that the previously expected increase to between 1.2 million and 1.5 million visitors (previous year: 950,000 visitors) in the current year can even be exceeded due to how advance sales are currently developing," according to the earnings statement.
The DEAG leadership sees the company "ideally positioned for the future thanks to its substantial financial resources and high density of events."
As of June 30, the Group’s liquid funds, including agreed bank lines, totalled some $60 million.
According to DEAG's earnings statement, the group benefits from the high level of loyalty of its customers, nearly 90% of whom indicated that they would keep their tickets for postponed events.
"In conjunction with the current voucher solution in place in Germany, this will further secure DEAG’s liquidity position," the company states.