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Cineplex posts first quarter loss on poor attendance

Cineplex posts first quarter loss on poor attendance

Cineplex (TSE:CGX) reported Thursday that it swung to a loss in the first quarter due to lower attendance at theatres and a lack of box office hits like Avatar that boosted year-ago results.

For the first three months of 2011, the company, which is based in Toronto and has nearly 1400 screens across the country, reported a net loss of $0.8 million. This is comparable to the $3.8 million gain that Cineplex experienced in the year-ago period.

Total revenue was $221.4 million, a 13.3% decrease from the same period last year, driven by a 14.6% decrease in attendance to 15.3 million patrons.

Box office revenue decreased by 18.2% in 2011, dropping to $130 million. In addition to lower attendance, Cineplex attributes much of this decline to the 2010 release of the record breaking film, Avatar, the highest grossing film of all time. The company said the 2011 figure is in line with 2009 box office revenue.

The concession segment of the business also saw a 12.3% drop in revenue to $65.2 million due to a lower number of movie-goers.

However, other revenue, generated through media and games and other sales, increased 19%, to $26.3 million. The company said this was due to media revenue growth, as well as increased sales of gift cards and coupons, and last year's June opening of the Cineplex XSCAPE Entertainment Centre in Calgary.

Film costs dropped 24.2% to $65.5 million, mainly due to last year's strong performing titles, like Avatar and Alice in Wonderland, for which prices were inflated.

Despite lower lower first quarter profits and revenue, Cineplex announced it was increasing its monthly dividend from $0.105 per share, or $1.26 on an annual basis, to $0.108 per share, or $1.29 annually.

Cineplex Galaxy, which operated Cineplex Entertainment, converted from an income fund to a corporation earlier this year.  It runs 131 theatres located from British Columbia to Quebec.

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