Hot titles give Cineplex Q2 bounce
EmptyTORONTO -- An improved group of Hollywood titles helped Cineplex Galaxy Income Fund, the country's largest exhibitor, post sharply higher second-quarter earnings Friday.
Toronto-based Cineplex Galaxy said earnings for the three months ending June 30 surged to CAN$8.3 million ($7.9 million), against a profit of CAN$2.9 million in 2006, as releases like "Spider-Man 3," "Shrek the Third" and "Pirates of the Caribbean: At World's End" lured Canadians back to the multiplex.
Operating 1,329 screens at 132 theaters nationwide, Cineplex Galaxy saw revenue rise 9% to a record CAN$199.99 million ($192 million), compared with a year-earlier CAN$183.6 million.
Cineplex Galaxy CEO Ellis Jacob told financial analysts that Canadian exhibitors were experiencing "a good summer for films," pointing to big numbers for such releases as "Harry Potter and the Order of the Phoenix," "Transformers," "Ratatouille" and "The Simpsons Movie."
The Cineplex Galaxy Income Fund owns a controlling 76% stake in the Cineplex Entertainment Limited Partnership, with Canadian leveraged buyout specialist Onext Corp. holding the remaining 24% stake.
The improved earnings for Canada's largest exhibitor provided a sharp contrast for a new report from government statistics agency Statistics Canada, which showed that, in 2005, the last year surveyed, Canadians stayed away from local cinemas in droves.
"The silver screen lost much of its luster for Canadian moviegoers" in 2005, the report stated.
Statscan reported that falling movie attendance that year feuled a profit squeeze for major exhibitors as domestic cinema ticket sales dropped 7.8% compared with 2004 levels, to 105.2 million, halting an upward trend that had lasted a decade.
Statscan concluded that a lack of Hollywood blockbusters that really connected with Canadians accounted for the slide in attendance, in addition to the growing appeal of DVDs and other home entertainment alternatives.
Fewer Canadians going to cinemas hit the exhibitors' bottom line, with revenue dropping 5.3% to CAN$1.2 billion in 2005.
Total earnings came to CAN$29 million, down sharply from a profit of CAN$110 million in 2004.