Jul. 29, 2003 - MIYAZAKI, Japan -- Phoenix Resort Co., operator of the Seagaia resort complex in Miyazaki Prefecture, incurred a net loss of 3.5 billion yen in the year ended in March, bringing its cumulative loss to 9.7 billion yen, sources familiar with its financial state said Tuesday.

Phoenix Resort has posted red ink for two years in a row since it was placed under private management.

The resort operator, which was partly owned by the Miyazaki prefectural government, filed for court protection in February 2001 and was later bought by U.S. investment fund Ripplewood Holdings LLC.

In fiscal 2002, the company's revenues came to 13.3 billion yen, but operating expenses totaled 15.9 billion yen, leaving an operating loss of 2.6 billion yen.

The poor showing was blamed on a temporary suspension of its indoor swimming complex, Ocean Dome, the sources said.

Phoenix Resort invested about 10 billion yen as a way to rebuild itself.

Under the first-phase investment program, the company launched a golf school and renovated golf courses.

The company is now considering building an aquarium and a hot spring facility under the second-phase program.

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