Cineplex Profit Up Despite Lower Canadian Cinema Attendance

Canadians paying a premium for 3D movie tickets helped cinema chain post higher fourth quarter earnings.

TORONTO -- Despite reduced overall revenue and theatre attendance, Canadian exhibition giant Cineplex Galaxy Income Fund on Thursday posted sharply higher fourth quarter earnings from premium 3D ticket sales and record concession sales.

Fourth quarter revenue fell 2.6% to $240.8 million, and theatre attendance was off 8% to 15.7 million customers nationwide as the latest quarter was without the box office pull of Avatar 3D during the Christmas 2009 film-going season.

At the same time, Cineplex managed a 15% lift in fourth quarter earning to $10.9 million by exploiting, post-Avatar, the 3D film boom.

Through 2010, the Canadian exhibitor installed digital and 3D equipment across its network to screen a string of blockbuster Hollywood 3D movie releases.

Three of Cineplex’s top fourth quarter releases screened in 3D: Harry Potter and the Deathly Hallows on Imax screens, Jackass and Tangled. That allowed the percentage of box office revenue earned from the 3D and Imax titles to come to 28% of Cineplex’s total box office results for the latest quarter, up from 19.8% from the same period of 2009.

“What helped us was our media business, an up-charge on 3D tickets, and concessions did well. They were a record in the fourth quarter,” Cineplex CEO Ellis Jacob said Thursday.

The Cineplex topper is predicting a bad first quarter performance, based on last year's strong box office from Avatar 3D and Alice in Wonderland 3D.

But Jacob is more optimistic about the second and third quarters of 2011, based on a strong number of Hollywood tentpole movies in the studio pipeline.