Wonderla Holidays Limited (WONDERLA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day. And welcome to the Q4 FY '20 earnings conference call of Wonderla Holidays hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay from ICICI Securities. And over to you, sir.

Yes. Good evening, everyone. On behalf of ICICI Securities, I'd like to welcome everyone to the call today. From the management of Wonderla, today, we have with us Mr. George Joseph, the Joint Managing Director; and Mr. Satheesh Seshadri, the Chief Financial Officer. I would now like to hand it over to the management for their opening remarks.

Thank you very much. Good afternoon, everyone. On behalf of the management of Wonderla Holidays Limited, we extend a warm welcome, and hope all of you are safe and healthy. We are here on this conference call to discuss the company's performance for the fourth quarter of the financial year 2019/'20. We are facing unprecedented pandemic, and all of us are confined to our homes and in nationwide lockdown. Life, as we have known, has come to a standstill. The pandemic is a challenge for the countries across the world. It is inflicting increasingly high human and industry loss worldwide. A significant portion of our economy is in a shutdown mode. To curtail the spread of COVID-19 virus and to maintain social distancing, a nationwide lockdown was announced. Hence, all our parks faced direct impact of this on footfalls. Our Kochi Park was closed down from March 11, 2020. Bangalore Park, the Bangalore Resort and the Hyderabad Park were closed down from March 14 and March 15, respectively. Consequently, we lost more than 15 operational days for our parks. Our Bangalore Park witnessed a decline of 38% in footfall, and the parks at Kochi and Hyderabad saw footfall reduced by 21% and -- sorry, 31% and 22% respectively. Looking at the financial performance score card. The revenue for Q4 of FY '20 at INR 42.4 crores was lower by 30% compared to INR 60.6 crores recorded in Q4 FY '19. Our Q4 FY '20 EBITDA declined by 71.6% Y-o-Y from INR 17.8 crores to INR 5 crores. Our profit after tax for the quarter, inclusive of the exceptional item of tax reversal, was INR 1.5 crores as against PAT of INR 6.9 crores reported in the corresponding quarter of the previous year. Our cash PAT, that is PAT plus depreciation, at INR 11.9 crores is lower by 29.4% compared to INR 16.8 crores of Q4 FY '19. On a full year basis, our revenues also decreased marginally by 4% Y-o-Y from INR 282 crores to INR 270.8 crores. EBITDA for FY '20 stood at INR 104.1 crores, 9% reduction from INR 114.3 crores in the FY '19. Profit after tax is at INR 64.7 crores, an increase of 17.7% from INR 55.4 crores recorded in FY '19. Our full year cash PAT is INR 106.5 crores, which has also increased by 12% from INR 94.9 crores generated in FY '19. Following the settlement of our service tax litigation under Sabka Vishwas Legacy Dispute Resolution Scheme 2019, we recorded an exceptional item in the form of reversal of excess provision amounting to INR 15.57 crores. The company has opted to avail Sabka Vishwas Legacy Dispute Resolution Scheme 2019 announced by the Government of India in September 2019. Accordingly, the payment made during the current year towards the settlement of this pending litigation under the scheme and the earlier payments made under protests have been adjusted against the provision, and the excess balance as per the book has been reversed as income. I would now like to emphasize on the company's position and strength in our balance sheet. Wonderla is strongly placed to overcome this dire situation. We generate healthy free cash flows annually and prudently manage our finances. We are a debt-free company, as you are all aware, and therefore, have no short-term and long-term outstanding repayment obligations. In addition, we currently have liquid assets of approximately INR 133 crores in mutual funds and bank balances. This is sufficient to cover our operating expenses for more than one year. We have a solid asset base in the form of freehold land across 4 states. In addition to 64 acres of land in Chennai, across all our 3 operational parks, we hold a land parcel of 224 acres, of which 94 acres are being developed and utilized for parks. We have 129 acres of excess unencumbered land available to expand our existing parks, but we hope the lockdown does not get prolonged, company is in the comfortable position and has got high liquidity to deal with the current situation. Even in a scenario of prolonged lockdown, where our reserves get depleted to meet the ongoing expenses, we are in a highly comfortable position to raise debt at favorable rates as we have strong debt-free balance sheet and substantial unencumbered assets available to collateralize. Amusement parks fulfill human desires to roam, play and experience thrills, for which there is no real substitute. They will continue to provide a unique and irreplaceable form of value, with memories to be cherished for a lifetime. We have already seen parks open in China and Southeast Asia to a good response. Majors parks in Europe have also indicated a potential date of reopening. The industry will adopt to survive, prosper and continue to deliver value in the future. With that, friends, let us start the question-and-answer session. Thank you all very much.

[Operator Instructions] The first question is from the line of Shweta Rane from Finquest Securities.

Yes, sir, I have a few questions. Your earnings has been stagnant for last 5 years. Could you give us a reason for it?

The earnings, I mean, see, what happened, our Kochi Park is about 20 years now, and the Bangalore Park is 15 years. And the recent park, Hyderabad is already 3 to 4 years. So in every industry, there is a diminishing rate of return, and we are no exception. So we have been seeing declining footfall, I mean, that's coming on a consequence of certain events in the economy, for example, when in 2017, when the service charge -- I mean, the entertainment tax was brought in from an almost very insignificant rate of entertainment tax to 15%, there was a decline in footfall. Then there are some when the service tax of -- I mean, GST of 28%, further decline. So there is always -- I mean, it is on account of certain events in the economy as well as a diminishing appetite for the amusement parks. At the same time, we are addressing this by adding new attractions and new rides in -- across all the parks. And we are also taking up a lot of reengineering steps to see that the footfall grow. And if you look at the competitors and across all the parks in the country, our stagnation is not very significant. Rather, we have shown the positive growth in 2018, '19, despite the flood in Kerala, the other parks, of course -- I mean, Bangalore and Hyderabad, they are showing positive trend. So this is, I mean, on account of the various, I mean, events in the economy. At the same time, we are addressing it suitably to see that these get higher footfall year by year.

Sir, fine. But if you see now the pandemic situation, the economic situation is not very encouraging in the Indian economy. So I would like to know what will be your future course of action. And rather than expanding, why don't we improve the efficiency in the current parks? As you have said, we are -- you are doing the rides, you are introducing new rides because cost will increase, right? And if you have certain aspects on the cost as well, we would like to hear it.

Number one, as you are aware, the entire industry is -- I mean, the amusement park industry is closed from March 2020, and we are also closed from March middle. So right now, we are all thinking. And in fact, the association also has represented to the government that we may be permitted to reopen because all other sectors are getting reopened. If you look at the airline industry, we never thought that it will be open so fast. So we also hope that the government will definitely permit us to reopen the parks, of course, with the preventive and the health protocol, which we are getting ready for that. And if you look at the Chinese parks, the Disneyland -- I mean, Disney Park in Shanghai, which has reopened. And the first day itself, I mean, they could sell the -- all of the tickets, I mean, online. And the weekends are fully booked. So there's a pent-up demand in the country. Definitely, people would like to come out and have open entertainment, so we definitely feel that once the government permits us to reopen, the crowd will come back. Of course, we have planned our strategies for the reopening to provide the safety and, I mean, the health -- preventive protocol, including reducing the density. We understand in the Disney Parks, they have allowed only 1/3 of the capacity, so Wonderla, also they could, I mean, set it. In fact, if you look at our parks, our average capacity is about 8,000 to 10,000 per day. And even with 1/3 capacity, we'll be able to have around 3,000 to 3,500 people in each park. But we are projecting on an average 2,500 to 3,000 crowd on reopening. And that's why we don't expect the entire park to be permitted to be reopened. We only think that the government will only permit the land operations and rides operation. And we'll definitely have the social distancing norms in our rides. For example, one seat, I mean, in between will have to be left out. So there'll be a number of -- I mean, operations should be more. So all of that we have taken into account, and we find that our cost of operation on account of sanitization and the hands-free entry and all that will be around INR 50 more per visitor. So we have taken all that into account, and we find that if we have a footfall of 1,300 plus, we will be breaking even in across all the parks. So we have done all that exercise required to have the preventive and health, I mean, guidelines for the authorities, and also trained our people. We have a training protocol, and training is going on. And all the rides are kept [indiscernible] condition, up-to-date with its proper lubrication. Our landscaping is taken care. Everything is -- I mean, the housekeeping and all, they are all employed. And the parks are all in [indiscernible] condition. So we are ready for, I mean, restarting. And we hope that the crowd will definitely come back.

Okay, sir. And see, on the cost that you said, the cost will increase, right?

Yes. Cost will increase by INR 50 per visitor.

Okay. All right. Okay. And sir, I would like to note, rather than expanding, why not we try to improve and bring the efficiency in the current parks itself? Because I just have -- I mean, you just mentioned that you have the excess land of 129 acres, right, which you are trying to develop.

Yes.

So rather than, in this economic situation, shouldn't we try to improve on the current parks?

Yes, yes. In fact, if you look at, madam, in fact, all these shutdown days, we are very profitably using for brainstorming, strategizing and making a new business model for our entire company. So we have a lot of sessions. In fact, all of us sit -- all the leadership team, we sit every day for about 3 to 4 hours discussing about various plans going forward. And our -- we have a strategy team, which meets every week as our -- I mean, the Former Managing Director, Mr. Arun Chittilappilly, he is heading the strategy and business segment for the company. And we have Mr. Lakshminarayanan, our Director -- non-Executive Director. He is also handholding us in that strategy. So we are making a new business model as far as, I mean, post-COVID situation. And we are working out various strategies, which I don't want to explain in detail, for the reopening, the post-COVID situation.

[Operator Instructions] The next question is from the line of Nemish Shah from Emkay Investment Manager.

So just I wanted to understand, once we get the go-ahead for reopening the park, what will be your strategy? Like, for example, we saw in Shanghai where the Disney Park, they have opened the park with a capacity limit of, say, 30%. So are we looking at something like that? Have we planned something?

Yes, we have. I mean it is like this. Once we are permitted to reopen, number one, we will ensure that the online booking platform is activated, and we are doing that. And we want to fill up the crowd by online booking. We want to discourage, I mean, walk-in. Initially, we want to discourage walk-in, so everything will be online. So even if we are -- as I mentioned already, even if we are permitted to operate only 30% of the capacity, it would be around 3,000 to 3,500 per day. And we don't even -- to begin with, we don't even expect that. Number one, for a period of 15 days, we'll have a penetrative pricing. That means our price will be discounted if you open only our land park. We will only have -- I mean, land parks, in the normal days, should be only 60% of the normal full rate. But even on that portion of the land park rate, we'll offer about 40% discount initially across the board. And we'll have a penetrative pricing for encouraging people to come and visit our park. So after 15 days, we'll charge the normal rate, which will be 60% of our normal rate. So that is the idea. So we will have, number one, a touchless entry, where with the online booking itself, they can seamlessly enter the park. Number two, there will be a tunnel through which they will pass through and we'll have the temperature taking arrangement, then we have the sanitizer, then we'll supply the mask wherever it is required. Then each ride will be sanitized. We will have a full-fledged sanitization program prior to opening the resort. There'll be fumigation in the park. There will be -- each ride will be sanitized and the -- and each ride operation before and after that -- the ride will be sanitized, and we will not open the water park immediately. So these are all the protocols we have planned. And as I mentioned already, we are also training for all our staff, including the [ resorts ] and the operators and all that. So that training process is already started. So we are all ready for, I mean, reopening, but I think we are awaiting the permission.

Okay, sir. That's good to know. Another thing was, say, supposing within the next 3 months, we get a go-ahead for the Chennai Park construction, then what is the ETA for completion of that park? Will it be 15 months or it might get a bit delayed?

No. In fact, as you are aware, as I mentioned last time, the government has permitted the exemption of the local body entertainment tax from the -- up to 5 years from the date of operation or from 1st of October 2021. So that means, initially, our plan was to complete the construction before 1st of October and start operation at least by 1st of October. Right now, with what is -- the situation, what it is being now, it is extremely impossible to complete the construction before the 1st of October. Today, after that initial investment [indiscernible] and all, we have not invested anything, but we have already mobilized certain contractors and their set-up teams at the park for starting the construction. Then the shutdown came. So now we have to restart it. We have already got the approval from -- NOCs from the fire department, pollution control and the forest, et cetera. And we are getting -- awaiting the final clearance from the district town planning and country planning. That is expected at any time after the lifting of -- after the normalcy. But then we will have to start the -- thereafter, and we'll see that the construction is completed, at least, by about 18 months. We are also requesting the government of Tami Nadu to extend the period of the LBT exemption. Right now, it's the 1st of October to elongate the period, so that the shutdown period and the -- I mean, this period is also taken care.

So somewhere around second half of FY '22, is that a good assumption for Chennai park opening?

Yes. As of date, we can assume that. But then what is the -- going forward, I mean, the country, things are, I mean, very dynamic and things are changing every day. And the number of COVID cases, especially in Tami Nadu, going very high. We will have to definitely look at the administration, what sort of decisions they are going to give and what are the timeliness and all that. So this all depends upon it. The situation, as you are aware, is very dynamic. And depending upon this ground situation, we'll have to take a view. And the thing I want to tell is that we are very serious about the Chennai, and we are very eager to continue the construction activity and see that it is opened at early -- at an early date.

The next question is from the line of Srinath V. from Bellwether Capital.

Sir, I just wanted to find out if we are looking at the Imagicaa opportunity given that the asset is under the default? And are we looking at the opportunity to kind of run it as in a service model? Or how do you see stressed asset opportunities given, across the board, you're a very rare case of having a wonderful balance sheet, the industry may not have that kind of good balance sheet? So are you looking at other working assets in the industry?

No. Mr. Srinath, I mean, right now, if you ask -- if you want a direct answer, I'll tell you that we are not looking at any acquisitions of Imagicaa. We are not looking at all -- at that particular option at all. Our idea is to develop our own model because we have a distinct model and distinct, I mean, model of our own. So we want to create our own parks and -- with our distinct, I mean, superiority. So we will not look at acquiring another park. But at the same time, if somebody is acquiring the Imagicaa and if they want an operator, we'll definitely look at that as an operator model, wherein, without any cash investment, we'll operate with a revenue sharing basis. We are not, I mean, close to that idea.

Okay, okay. Just wanted to find out, have we been able to variabilize any of our cost lines? And on reopening, would we be able to convert some of our cost lines based on the number of footfalls that we get?

Mr. Srinath, I should tell you, I mean, see, normally, our -- the monthly overheads come to around INR 15 crores -- INR 13.5 crores to INR 15 crores in a month. But right now, on account of our cost reduction and the extreme cost control, we could limit it to about INR 4.5 crores per month, INR 4.5 crores, 75% reduction in a month. That is that much -- very much achieved on account of the cooperation for all our staff. In fact, if you look at all our people, have agreed for 50% wage cut. And all of them are executed in a letter with the company, except, I mean, a few. Maybe about 90%, 91% of the people have agreed to take a 50% wage cut. However, we have seen that -- we have ensured that minimum salary of INR 12,000 is paid. As you are aware, the salary comes to the INR 12,000 after a 50% cut. So like that -- then thereafter, we have put on hold all of our marketing communication expenditures, which we've spent in a very large amount in the first quarter, that we have put on hold. Then all our AMCs, we have reviewed, and we have, I mean, either extended the period of AMC without any additional expenditure or brought down the expenditures by about 25% to 30%. So across all segments of expenditure, we have ensured that there is a significant reduction. And whatever we achieve during this shutdown period, to a certain extent, we'll be able to carry on -- go ahead -- I mean, continue that even after reopening. We'll be definitely looking at reduction of numbers in the operation of the rides and all that. We'll be able to significantly reduce the expenditures going forward.

I also wanted to find out, given that some of these parks at some point of time, you actually shut down for a small period of time to do some renovation, revamp or maintenance CapEx. Is this time off, have you been able to make those necessary changes? Or are we just doing base maintenance and keeping it as it is?

Yes. Mr. Srinath, we don't shut down our parks for maintenance. We shut down the rides for maintenance. Only the limited rides, which we have the annual maintenance schedule. After the schedule, we shut down certain, I mean, rides maybe for 15 days, 20 days, 1 month and all that for the annual shutdown maintenance. That is a routine schedule, and that is going on. And everything, for the calendar of the year, we are carrying out. And right now, I mean, we have put on hold all shutdown maintenance right now because we wanted to curtail the expenditures. Once the start -- I mean, the parks start the operation, we will continue with the routine shutdown maintenance, which comes during the entire part of the year. One by one, we take up part of the ride. So we don't close down and do shutdown maintenance.

Sir, can I add a point, George, sir. Satheesh Seshadri here. To answer your question, see maintenance -- shutdown maintenance, we try to complete before the fourth quarter, okay, so that the first quarter is up and ready, okay? Because the good footfalls come during the first quarter. So even during this year, we have completed the major maintenance of some of the rides during the last quarter of FY '20, which means all our rides are up and ready, and we are also testing it. And as George has clearly put out, we are also greasing the equipment wherever necessary. So there is no requirement of shutdown during this period.

Okay. Just one last maintenance question before -- so I just wanted to find out if the Bhubaneswar transaction is completed in terms of the land part of the transaction, the lease.

No.

Mr. Srinath, in fact, I mean, the Bhubaneswar, we have not entered into any written agreement with the government of Odisha. In fact, we have only a discussion wherein they have offered a lot of incentives. And we have not incurred any expenditure for Bhubaneswar till today. The offer is open, and we'll have to start -- I mean, continuing the dialogue with them once the normalcy returns. But we have not tendered into any finality with the government of Odisha. And we will definitely look at it after the normalcy returns.

Sir, can I add here, sir? We have also made the application in the government of Odisha. And the application has been accepted by the Odisha government of high-level committee. But after that, the COVID issue happened. No progress has happened. We have to wait and see that.

The next question is from the line of [ Vaibhav Gupta from Right Horizons Minerva Funds ].

I just had one. I was wondering that we are sitting on nearly INR 120 crores of cash. You have sizeable undrawn line, you have a debt-free balance sheet, have a cost structure that isn't particularly worrisome given our liquidity. And now, we have a stock that is considerably below even conservative estimates of liquidation value. For a company that clearly has room to encumber its balance sheet as required, why are we not taking advantage of these valuations and buy back some stock? Like what is preventing us from going down this road?

You mean by buyback of...

Buyback of stocks, like buying back stocks.

Sir, can I answer this question, sir?

Yes, please.

Sir, the priority of -- as George sir had put it during this question, that the management is not coming back on the Chennai project, okay, which means that we have earmarked certain funds to give as advances to the contractors and the ride procurement. So we would be requiring this fund. Even if the situation comes to normalcy, our priority now is on the Chennai Park. First is park opening -- existing park opening. Second priority is Chennai Park. And now we are not looking at any restructuring of capital or anything, okay? The priority is we need the cash for the Chennai Park.

The next question is from the line of [indiscernible].

Can I know the average capacity utilization for FY 20, '21?

Average?

Capacity utilization.

Capacity utilization. See, we have a capacity utilization of about 30%.

For '20, '21?

Yes, yes.

Okay. And the next question, if I'm not wrong, in the previous question, you have answered that if we assume the worst-case scenario, like, lockdown getting extended more, then we are incurring about INR 4.5 crores per month as a fixed cost and nothing more than that, if I'm not wrong.

Yes. See, what we had answered, during the lockdown period, we have -- if you see our cost structure, about -- the variable cost is about only INR 2 crores, INR 3 crores. That is towards the F&B, utilities, et cetera. All other costs are either fixed or semi-fixed in nature, okay? Be it maintenance, be it salaries for the non-offloads and everything. Now what we have done is we have bought down the expenses to about INR 4.5 crores. This has been arrived by savings in salaries, stopping -- or now rationalizing the expenses on marketing. Actually, there is no much expense in marketing and the pay. And also we have also spoken to the vendor and taken some discounts. So this has helped us to come to at this level when the park is completely closed. However, when we open the park, again, the expenses is bound to go up.

Okay. Got it. If you can throw some light on what is the new strategy that management is looking for or if you can give some direction on what -- direction...

Okay. There are -- I have to answer this in 3 parts, okay? The first part is for us, the hygiene and safety is always important. And we are -- we have always prioritized hygiene and safety, and there won't be any compromise on that. And our recovery action plan takes care of all the parameters, which is required. Be it mask, be it social distancing, be it one seat to cover, be it sanitizing, everything is going to be taken care. That's just number one. First priority is recovery action plan. Second priority is we have also -- as association, we have already represented the government of India to allow the park because it is outdoor activity, unlike malls or theaters, which is indoor activity, which is under AC. Ours is sun under the fun -- fun under the sun, rather, sorry, fun under the sun. This is number 3. Number 4 is, we have also got an update from CNN. If you go to the net, it clearly says that there is no risk in opening the water park. I will read the, I mean, short text on that. The U.S. Center for Disease Control and Prevention said you don't need to worry about virus transmission from the water itself. So this is what the CNN says, and you can also see it on the web, okay? So if the government allows us to open both the parks, we are okay with that.

Okay. And Mr. MD, sir, was talking about a new strategy after opening of the park. So is this, what you call, comes in new strategy? Or are we looking at some sort of other strategy?

What MD sir said is on 2 counts. Okay. The question was, are we stagnated at 25 lakhs footfall? First, the answer is no because if you see FY '18, '19, we saw a spike there, about 1 lakhs, 1.5 lakhs now compared to the previous year. That is point number one. Point number two, this year is a different year, not only for amusement parks, but the discretionary spend itself has come down during this year, and more on the economic downturn and the floods. The Bangalore and Kochi had extended flood times, okay. We all understand that. And finally, the COVID, which happened in the last week of March. So these are the things which have impacted, but we are -- we want to move to the next level, okay? We have been making about 10 lakh to 12 lakh footfall per year per park. So we are approaching towards that. And for that, we are building up some marketing strategy, which we will -- which will help us to elevate us to the next level of 25 lakh to 30 lakhs footfall. That is what he meant.

[Operator Instructions] The next question comes from the line of [ Rohit Shankar ] as an individual investor.

Sir, you were talking about giving discount at tickets and online transaction. How do you see the maintenance cost? So after the post-COVID, if you reopen, there will be a higher amount of maintenance cost. So how do you balance these? I mean, enough liquidity as well, but how do you balance this?

See, George sir has answered that question.

Satheesh, go ahead. Satheesh? Satheesh, I'll take that question. Now basically, we have to see that our visitors, our guests come back to us. Now there is a lull, almost about 60 days, more than 60 days, we are all locked down, and there is a lull. So we have to see that the adventure-seeking youth will have to ensure that they come out of the place and they -- that risk mentality, they are to come out of that. There should be attraction for them to come back. That's why we said initial period of 15 days, we'll have a penetrative pricing. But then the pricing will be brought back to the normal level immediately after 15 days. So then there are -- I mean, we will see that, I mean, we charge the normal rate, and we also cover the cost of the -- I mean, the additional cost on account of the sanitation exercise that is around INR 50 per guest. So that will be taken care. So at the same time, control on expenditure. Whatever the frugality we could achieve during this period will continue, there will be control on expenditure. So EBITDA will continue to be good and -- though slightly depressed. But it will be -- continue to be good and sufficient, I mean, bottom line.

Sir, I think we have lost the line of Mr. Seshadri. I'm just trying to reach him. Yes. In the meanwhile, we'll proceed with the next question that is from the line of Parimal Mithani from Credential Investments. Sir, we have Mr. Seshadri also connected.

I just wanted to know in terms of -- if you can -- I didn't get clearly what is the average cost of fixed cost while running the park normally in normal time. Can you just tell -- relay them?

Yes. So that's what I was trying to say. If you take our expenses, it's about INR 14.5 crores on average per month. In that, if you have to take the food and the retail and utilities are purely variable, okay? All other costs are fixed or semi-fixed in nature. For example, if I have to do a maintenance, okay, I have to -- there is a maintenance, even if I do for the park landscape, fuel and the rides. So it is semi-fixed in nature. Number two is avoidable cost could be marketing and some of the maintenance expenses, rationalization we could then. It will still be around INR 7.5 crores to INR 8 crores, if you take out the controllable expenses totally out.

Okay. On average, it will be INR 7 crores to INR 8 crores.

About INR 8 crores if you take out the controllable expenses, I have not said fixed expenses. I am taking marketing as a controllable expenses where there is no transaction or no business.

Okay. And sir, second question is, if you can highlight what is the CapEx going. If you -- what is your vision for next 2, 3 years? How do you plan to go about it since post COVID, lot of things have changed? How do you plan to go ahead with...

Normally, our sustaining CapEx per year is about INR 22 crores, okay? For this year -- because every year, we have about INR 6 crores for adding rides. INR 6 crores to INR 8 crores, we spend on adding new rides at each of the location, at least INR 2 crores per location, we do that. This has been normal for us. But this year, we will not have any major spend on sustaining CapEx, okay, for this year, at least FY '21, okay? FY '22, we have to see. There is a time to see that. It's too early to comment anything on that.

And sir, last question is, have you insured yourselves against such an event in terms of whether an insurance that you've taken in terms of...

No, we are not insured against loss of profit or loss of -- on all black swan events.

[Operator Instructions] Next question is from the line of [ Chabbi Girish ] as a retail investor. Since there's no response from the line, we'll move to the next question that is from the line of [ Nath Balakrishnan from Spark Fund ].

Yes. I have a couple of questions. The first one was on the additional cost that you said you were going to incur on sanitation and disinfecting your facility. So this cost of INR 50 is arrived at on the basis of how many number of visitors you've reckoned?

Yes. Look, this is based on breakeven levels, yes.

No, is it based on 1,300 visitors? Or is it based on a higher number of visitors is what I'm trying to know?

No, it is based on our higher number, about 2,500 visitors, yes.

Understood. So -- but if you're operating at half that utilization, to begin with, you said 1,300 visitors is what Mr. George is alluding to, this is going to be pass through. Or...

No, no, no. We are just saying that it is a part -- it will be our variable expenses.

It is variable. It is -- okay. Understood now. Understood. And secondly, I just wanted to understand your broad thoughts on what in your assessment -- or rather when in your assessment do you think you possibly will be able to go back to reclaiming the peak of 25 lakh to 30 lakh footfalls from visitors?

See, everybody are talking about V, W, is that bath tub, all type of economic rebouncing, okay? So I would be very conservative there. If you ask me a conservative question, I will say, at least, 2 years to come back to those levels. I think '21 is gone. '22, I will not comment too much. So I will look at '23.

Okay. Now -- okay. So if I can just squeeze in one more question. See, I think we are all pretty much reconciled to the notion that this -- the COVID is going to be around for quite a while, and it's not going to be disappearing in a hurry. So in that context, do you possibly see merit in kind of holding off on aggressively expanding into Madras to try and assess how the reaction is going to be from customers after you reopen your existing facilities? Or is it the view that you have taken that you will plunge headlong into Madras, regardless of what the environment is going to be?

No, no, I think we put this point very clearly. Our first priority is hygiene and safety, which is part of our recovery action plan. Second priority is the opening of existing parks. The third priority is the Chennai Park. So we'll go in that order, okay? When we open the 3 parks, we will also have the feelers.

Yes. So I'm saying, therefore, that if the feelers are contrarian to what your expectation is.

It is too early, sir, about -- to talk about it. We have still not opened.

I know you've not opened, sir, my question is different. I'm saying if it is -- if it so turns out that it belies your expectation, my question is, would it be fair to assume that you might want to kind of postpone expanding into Madras as aggressively as you had originally planned? Is it contingent at all on that or you will go ahead with Madras, regardless of what the reception is, is my question?

No, no, no. We will not go ahead with Chennai, regardless of what is happening. We'll definitely watch out the situation. And I mean, we agree that, I mean, COVID will take a longer time. But at the same time, the country cannot be locked down for a long time. So the parks have to be opened up. And definitely, the existing parks, that will be reopened. So basing on the -- I mean, the reception -- or the crowd on the existing parks, we will definitely look at Chennai, but that is not the priority right now. We definitely take your point that we'll have to see the situation. And then only, you can -- you have to take a decision going ahead with the construction in Chennai.

Okay. So -- but I just want to add one more thing there, sir. See, the Chennai construction is 18 months, okay? I'm sure in 18 months, much of the case, what we are seeing now could have a different picture. I mean you have to keep that also in mind. So we are also looking at all this probability. What I'm saying, trying to put is, we are also looking at all this probability.

So may I place a request, therefore, with you gentlemen, that when we have this call again at the end of the first quarter, would it be possible for you to kind of share with us what are the benchmarks that you will have in mind before -- from your existing parks on attaining which you will decide to go ahead with your expansion into Madras or failing which you will kind of go slower? So I'm not asking for you to make that disclosure right away, but you can possibly reopen your existing parks as and when you get the permission. And depending on how they progress, can you share with us some of your learnings from that and how you would decide to kind of calibrate your expansion into Madras? That will be helpful.

Yes. Can I?

Yes, so go ahead.

See, firstly, we want to take -- keep you updated that we have appointed a marketing agency also to look at the market post COVID for the Chennai Park, okay? That study is also happening simultaneously. We are going to get a lot of details on that. But this is not the right time to do because we can't do it on a -- research on a, I mean, software format, okay? We have to travel physically, interview people and get it, okay? That is due and that will also give us a lot of input on how do we proceed and everything. But as a management, the thought process, what we are seeing is it is 18-month construction. And we have a safe bet on that.

Ladies and gentlemen, that will be the last question for today. I now hand the conference over to Mr. Adhidev Chattopadhyay for closing comments. And over to you, sir.

Yes. On behalf of ICICI Securities, I'd like to thank everyone for joining us on the call today. I'd now like to hand it back to the management for their closing remarks.

Well, thank you very much for the insightful questions, and I appreciate your concerns. As I've mentioned at the beginning, we are all in a very, very devastating times. These are all uncertain times. We don't know what is going -- what is in store for us, but we can only pray that, I mean, things do get better. But from the experience of, I mean, countries like China, which had the COVID as early as in November last year, things are getting back to normalcy. We hope that our country will also reach normalcy. And I can only assure you that a lot of ground work is going on in the background on strategy and business planning and creating a business -- new business model for Wonderla. And Wonderla, when we reopen, it will be a different story altogether. I can already assure you that. So thank you very much. I wish you a very safe and healthy life going ahead. Thank you very much.

Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes today's call. Thank you all for joining us, and you may now disconnect your lines.