Tag Archives: Cineplex

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Cineplex earnings drop 6.7%

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TORONTO — Canada’s Cineplex Entertainment has begun to feel the boxoffice chill.

The Toronto-based exhibition giant on Thursday reported earnings down 6.7% to CAN$23.1 million ($19.8 million) for the three months ending Sept. 30, compared with a profit of CAN$24.7 million in 2007. The slide was attributed to lower boxoffice and concession revenue.

Total revenue was off 2% at CAN$239.1 million ($206 million), compared with a year-earlier CAN$244 million. Attendance at its 192 theaters nationwide fell 6% year-over-year to 18 million visits.

Boxoffice revenue of CAN$145 million ($125 million) at Cineplex slipped 3.6% during the latest quarter, compared with 2007, short of the Canadian exhibition industry average drop of 4.5% for summer 2008.

Dominant boxoffice from Warner Bros.’ “The Dark Knight” failed to live up to a 2007 summer buoyed by “Harry Potter and the Order of the Phoenix” and “Transformers.”

In a conference call with analysts Thursday, Cineplex executives became the latest here to insist they are well-positioned to weather the current tight credit market and approaching recession.

“Our balance sheet is strong,” Cineplex CEO Ellis Jacob said, as he pointed to renegotiated credit facilities and hedged interest rate risk.

Lower attendance brought lower film and concession costs, and Cineplex also posted lower interest and income tax expenses during the quarter.

“We remain positive on the balance of the year given the strong slate of films and the industry’s historical boxoffice performance during difficult economic times,” Jacob said.

Source: Hollywood Reporter

Headline, Industry News

The Scotiabank Theatre Toronto

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TORONTO (CP) _ Hockey and opera are just a start as Cineplex Entertainment looks past movies to fill seats at Canada’s dominant cinema chain.

The 129-theatre operator has rolled out its "digital pre-show network" _ TV ads before the movie _ and the technology enables Cineplex to radically broaden its content.

It recently started high-definition-television presentations from New York’s Metropolitan Opera and a few National Hockey League games on some of its big screens, and CEO Ellis Jacob said Wednesday it is looking at other options ranging from bingo and corporate meetings to concerts.

"In effect, our theatres are becoming true entertainment destinations," said Jacob, head of the Cineplex Galaxy Income Fund (TSX:CGX.UN) which owns 59.7 per cent of Cineplex Entertainment LP, with the rest controlled by Onex Corp. (TSX:OCX).

Other non-movie sources of revenue are expanding as Cineplex takes a widening proportion of its revenue from snacks, game arcades, on-screen advertising and other businesses.

Meanwhile, the Cineplex.com website is adding content and may eventually enable users to buy downloads of movies after their theatrical runs, Jacob said.

In the latest revenue diversification, Cineplex and the Bank of Nova Scotia (TSX:BNS) offered details Wednesday on a deal outlined in November giving the bank naming rights to five big-city theatres and establishing a loyalty-card relationship.

Financial aspects of the arrangement remained undisclosed.

The Paramount Toronto will henceforth be the Scotiabank Theatre Toronto, and name changes are in the works for locations in Montreal, Calgary, Edmonton, and Vancouver.

The Scene incentive program starts immediately in Toronto, expanding elsewhere across Canada in the spring, providing Scotiabank cardholders with movies, games and concession merchandise through rewards that "can be accumulated and redeemed quickly and easily," the companies stated.

CEO Jacob told an investor conference that Cineplex considered other possible loyalty-plan partners including the Aeroplan Income Fund (TSX:AER.UN), but the target 17-to-25 demographic has limited interest in accumulating travel points and prefers "instant gratification."

He said moviegoers have shown little concern for the identity of the theatre operator, and Cineplex saw "great value to actually branding a theatre with one of Canada’s top brands."

He added that Cineplex has been "way ahead of the curve" with non-movie presentations on the big screen, having enjoyed previous success with wrestling and working now to expand its hockey offerings.

"The next move is into concerts and other live events that can be simulcast," Jacob said.

"The feedback we are getting from the hockey and for the opera has just been tremendous _ and the great thing about the opera is it’s bringing people from a demographic that don’t normally go to movies. They come back, and now they’re experiencing this 50-foot screen and saying, ‘Hey, maybe we want to come and watch a movie in this environment."’

Headline, Industry News

Cineplex Q3 profit $9.3M

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TORONTO (CP) _ Third-quarter profits at Cineplex Entertainment LP (TSX:CGX.UN) soared 63.1 per cent to $9.3 million as Canada’s largest movie exhibitor booked record revenues and announced a new loyalty program with Scotiabank (TSX:BNS). The 132-theatre partnership, owned 59 per cent by the Cineplex Galaxy Income Fund (TSX:CGX.UN) with the rest controlled by Onex Corp. (TSX:OCX), said Thursday the improved earnings reflect robust box-office receipts and the success of its Famous Players acquisition.

"The Canadian industry box-office revenues for the third-quarter of 2006 were up 3.1 per cent versus last year," CEO Ellis Jacob said in a conference call with analysts. "By comparison, I am very pleased to advise that Cineplex’s box-office revenue for the quarter was up eight per cent."

Same-store box office revenues increased 5.5 per cent, year-over-year, and average ticket price was $8.09 for the quarter, compared with $7.76 before. Total revenues, meanwhile, reached a record $199 million, compared with $151.9 million in 2005. Distributable income per unit for the quarter ended Sept. 30 was 46.3 cents, up from 20.6 cents in the prior year.

"These results reflect the work that has been done during the past year by our management and staff in bringing Cineplex and Famous Players together," Jacob added. "We have realized greater synergies than we originally planned, and have identified new ways to capitalize on opportunities to grow revenues and profits."

The partnership _ which operates under the Cineplex Odeon, Famous Players and Galaxy marquees _ said its five-year agreement with Scotiabank will include the creation of a customer loyalty program to launch in 2007. The deal, which has some renewal options, includes media rights and naming rights for five flagship Cineplex Entertainment theatres. Financial terms were not disclosed but the deal was expected to have a positive impact in 2007.

"This unique partnership will enable Canadians to earn rewards by doing the things they enjoy, like going to the movies, or doing their everyday banking," Scotiabank CEO Rick Waugh said in a release.

Meanwhile, Cineplex executives are reviewing the proposed tax changes for income trusts announced by the federal government on Tuesday.

"The fund is considering this announcement and the possible impact of the proposed rules to the fund," said chief financial officer Gord Nelson.

While declining to speculate on the fund’s status when the new rules come into effect in 2011, he said: "Our focus has been and will always be maximizing unitholder value and this includes minimizing distribution risk."

Looking ahead, Cineplex is predicting a strong box-office results to continue into 2007 as Hollywood prepares to release third instalments of the Spider-Man, Shrek and the Pirates of the Caribbean franchises. Cineplex units were down a penny to $11.23 near midday on the Toronto Stock Exchange.