3-D helps triple Cineplex profit
Thu May 13, 12:51 PM
Profit at Cineplex Galaxy Income Fund nearly tripled in the first quarter as moviegoers gorged themselves on concession food and expensive 3-D movies.
Canada's largest theatre chain earned $9.5 million in the first three months of the year, up from $3.7 million a year earlier.
Attendance increased by 13 per cent, bringing in just over $18 million during the quarter, up from $15.9 million a year earlier.
But "other income," which includes concessions, was up nearly 25 per cent to just over $22 million. Overall revenue was $257.2 million, an increase of 21 per cent from $211 million in the first quarter of 2009.
Cineplex CEO Ellis Jacob credited big-budget 3-D releases such as Avatar and Alice in Wonderland with boosting revenues, as both were shown on IMAX screens which typically bring in $3 to $5 more per showing. The two 3-D films contributed more than one-third of all ticket revenue.
"Our box office revenue this quarter was the highest in the history of the fund," Jacob said.
Avatar has gone on to become the top grossing film of all time, bringing in more than $2 billion US globally so far, or about $625 million in North America.
Cineplex also noted that its media division which handles on-screen and lobby advertising saw revenues climb 34 per cent to $14.2 million, helped by more spending by automakers and telecom companies.
Jacob said the company installed 50 additional 3-D projection systems during the quarter, bringing the total to just under 200 about 15 per cent of all Cineplex screens across Canada.
The company also revealed on Thursday it plans to change its structure back into a corporation from an income trust, something a number of trusts have done since Ottawa announced a new taxation regime for trusts that's set to begin next year.
The trust anticipates paying
.105 in dividends per share, identical to its current monthly payout.
Shareholders will receive details of the plan and vote on it. If it's approved, the transaction will be completed by Jan. 1, 2011.