Cineplex rides summer b.o. to huge Q3
EmptyTORONTO -- Surging cinema attendance in the summer for movies including "Ratatouille" and "Harry Potter and the Order of the Phoenix" led Canadian exhibition giant Cineplex Galaxy Income Fund to post a 166% jump in third-quarter earnings, the company reported Friday.
Toronto-based Cineplex said that 19.1 million Canadians visited its theaters this summer, up 24.4% from a year-earlier 15.4 million.
As a result, Cineplex saw earnings for the three months ending Sept. 30 climb to CAN$24.8 million ($23.6 million), compared with a profit of CAN$9.3 million in 2006.
Total third-quarter revenue increased 22.6% to CAN$243.9 million ($232.4 million), against a year-earlier CAN$199 million, on the strength of discounts on admission prices and concession charges and the introduction of a customer loyalty program.
Cineplex CEO Ellis Jacob called his latest quarter the best on record for the exhibition giant, which currently enjoys a 75% share of the Canadian cinemagoing market.
"The strength of the film product during the quarter and our focus on driving attendance to our theaters through strategic pricing initiatives is generating strong results," he said.
Jacob also told financial analysts during a morning call that a possible writers strike would not likely affect Canadian exhibitors for at least two years.
"We've lived through this before. The first group to be hit is more TV programming than actual movies, because there's been a large rush to get movies through the process," he said.
Jacob added that any eventually impact from a Hollywood shutdown will depend on how the upcoming SAG and DGA contract talks with the major studios fare.
Total boxoffice revenue for Cineplex during the latest quarter rose 21% to CAN$150.4 million ($142.8 million), a growth rate higher than the Canadian industry average of 16.5% this past summer.
Concession sales rose 25% to CAN$72.4 million ($69 million).
Cineplex also recorded CAN$21.1 million ($20 million) from "other revenue," including cinema screen advertising, up 26.7% from the prior year.
Cineplex Galaxy has a 76% stake in Cineplex Entertainment LP, which runs 130 multiplexes with 1,315 screens nationwide. Canadian equity fund Onex Corp. controls the rest of Cineplex Entertainment.