Cinemark First-Quarter Attendance, Earnings Rise
The movie theater operator's CEO discusses the firm's relationship with Disney amid recent discussion about its rental fees and possible M&A opportunities.
Movie theater operator Cinemark Holdings reported improved first-quarter financials on Thursday amid growth in concession and admissions revenue.
On an earnings conference call, management discussed its position should any M&A opportunities arise and its relationship with Disney, which has seen opposition to rising rental fees in Germany as of late.
The company, which has a strong presence in Latin America, posted earnings of $42.5 million, compared with $35.4 million in the same quarter last year.
Revenue in the first quarter reached $645.4 million, up 7.2 percent.
Admissions revenue rose 5.2 percent to $400.7 million in the first quarter. Attendance rose 6.5 percent to 65.46 million driven by domestic and international growth. Average ticket prices came in at $6.12, down from $6.19 in the year-ago period as a U.S. increase was offset by lower prices abroad. Concession revenue of $214.4 million was up 11.1 percent, and concession revenue per patron reached $3.27 during the three months ending on March 31, up from $3.14 in the year-ago quarter.
Said Cinemark CEO Tim Warner: "With our diverse global footprint, Cinemark’s box office results continue to outperform the North American industry, doing so for 23 out of 25 quarters on a currency adjusted basis."
He added: "We also continue to report remarkable statistics for concession per cap, achieving growth for 33 consecutive quarters and setting a new domestic record of $3.85. Our success continues to be driven by our focus on utilization across our total worldwide platform, including our core circuit and enhanced concepts."
As of March 31, 2015, Cinemark operated 497 theaters with 5,687 screens.
On the earnings conference call, Warner lauded Hollywood studios for the "great start" to a promising year. He touted the success of the likes of American Sniper, Fifty Shades of Grey, Cinderella, Furious 7 and Avengers: Age of Ultron, among others.The CEO said Cinemark was "incredibly enthusiastic" about this year's film slate and its diversity.
Warner was also asked about Disney's rising rental fees. Small theater owners in Germany have threatened to extend their boycott of Disney films if the U.S. studio doesn't claw back plans to increase film rental fees.
Warner said Cinemark has "always had an outstanding relationship" with Disney at home and abroad, calling it "a very stable relationship both here in the U.S. and in Latin America." He said that that high-performing films have always earned more. If Disney's slate performs as expected this year, the company would see a higher film rental performance, he added.
Overall, Cinemark said that film rentals over the past 10 years have been "fairly stable."
Discussing possible theaters or chains that may come up for sale, Warner said Cinemark was in a good spot to take "a prime position" in possible talks.