Cinema City Financial Results for H1 2010
3G - Grossing films, Growing admissions, Good performance
Full press release
- In the 1st half of 2010 Cinema City noted a consolidated EBITDA of EUR 31.3 million (+26.2% y/y) and consolidated EBIT of EUR 21.7 million (+26.2% y/y). Theatre operations generated EUR 28.1 million EBITDA, which was up by 83.7% y/y and EBIT of EUR 18.6 million (+135.6% y/y). The net profit of the Company totalled EUR 17.5 million (+26.6% y/y).
- The Company sold in total 15.1 million tickets, 23.5% more than in the first six months of the previous year. Same store admissions grew by 9.9% to 13.5 million tickets sold. Average ticket price went up to EUR 4.77 (+23.7% y/y). Average ticket prices in local currencies grew in all the countries supported by popular 3D titles.
- In the 1st half of 2010, Cinema City International N.V. (“Cinema City”) generated revenues from cinema related operations of EUR 116.4 million (+44.8% y/y) and the revenue from the sale of the real estate of EUR 91.2 million (+ 296.1% y/y). Revenue from cinema related operations comprise theatre operations, film distribution activities and other cinema related real estate. Revenue from the sale of the real estate is the one-time revenue from divestment of CCI’s real estate activity in Bulgaria.
- Revenues from theatre operations soared to EUR 106.3 million (+45.4% y/y).
- In the 2nd quarter alone, Cinema City’s revenues from cinema related operations went up by 28.6% to EUR 46.3 million. Total EBITDA of Cinema City in the 2nd quarter 2010 was EUR 11.1 million (+16.9%), and net profit was EUR 4.8 million (+16.6%).
- CCI opened a 15screen megaplex in Bucharest, Romania and reopened 1 cinema in Israel with 4 screens (6 screens before refurbishment). One cinema with 4 screens was closed in Israel. As at the end of June 2010 Cinema City was operating 69 theatres with 677 screens (+12.3% y/y). Investments in cinema chain were of EUR 14.0 million.
- Digitalisation of cinema chain: 193 digital projectors were installed as at 20 August 2010.
- Positive performance of cinema advertising. Development of co-operation with key clients. New projects on the way.
- Film distribution performance turned into positive number. Strong titles in the distribution and development of the business in Romania.
- Divestment of CCI’s real estate activity in Bulgaria to Israel Theatres Ltd for EUR 91.2 million in April 2010. First instalment of EUR 76.2 million paid to the Company. The transaction is described in the current report no 10/2010.
- Cinema City plans for H2 2010 include opening of 5 to 7 cinemas with around 65 screens, development of cinema advertising and active consideration of cinema business expansion in existing markets as well as in the new territories.
“Cinema City continues growing. In the first six months of the year we sold over 15 million tickets. The new screens that we opened in the second half of 2009 and in 2010 deliver very good results, and together with a very well received movie pipeline, the Company is noting another record financial results. Cinema City also uses the 3D revolution into its good account. With close to 200 digital projectors we observe increasing sales of tickets for films with 3D technology.” - said Moshe J. Greidinger, CEO of Cinema City, the largest multiplex cinema operator in Central & Eastern Europe and in Israel “In April we closed the transaction of sale of our Bulgarian real estate operations to our parent company Israel Theatres Ltd. This one-time transaction generated a high amount of extra revenue and cash, which allowed us to decrease significantly the Company’s debts. I am also happy to say that our film distribution activity develops successfully in Bulgaria and Romania. In these two countries we plan to expand with professional film distribution and support the cinema going culture.”
*selected financial data for H1 2010 and Q2 2010 is presented in the appendix 1
In the financial statement for the first half of 2010 the Company presents its operating results with revenues split into revenues from cinema related operations and revenues from the real estate revenues, which are summed up in the total revenue line. The reason for such presentation is the one-time very high amount of revenues from divestment of CCI’s real estate activity in Bulgaria, which was entirely included in the profit and loss account. Revenues from cinema related operations include theatre operations, film distribution and other cinema related real estate activity.
Revenues from cinema related operations amounted to EUR 116.4 million in the first half of 2010 growing by 44.8% y/y. This increase is coming both from the sound increase in theatre operations and in film distribution business. Revenues from sale of the real estate equalled EUR 91.2 million (+296.1% y/y) and they are the one-time revenue in such high amount coming from divestment of CCI’s real estate activity in Bulgaria. In H1 2009 the Company recognized revenues from the sale of real estate in the much lower amount of EUR 23.1 million (proceeds from sale of its 30% holding in the Mall of Plovdiv project in Bulgaria). Combination of these two types of revenues are summing up to the total consolidated revenue of EUR 207.6 million (+100.8% y/y).
Consolidated EBITDA of Cinema City went up to EUR 31.3 million (+26.2% y/y). The growth in EBITDA was achieved thanks to the strong increase in EBITDA of theatre operations and improvement of film distribution performance. It must be noted also that the contribution of real estate business in the EBITDA was of EUR 3.1 million in H1 2010 compared to the much higher contribution of EUR 9.7 million in H1 2009.
Consolidated EBIT amounted to EUR 21.7 million (+26.2% y/y) and the net profit to EUR 17.5 million (+26.6% y/y).
In the 1st half of 2010 the revenues of Cinema City grew in all markets of operations compared to the first six months of 2009. Revenues from the Polish operations accounted for almost 52% of the total CCI revenues (in EUR up by 27.4%, in PLN up by 14.0%). The most significant growth of revenues of +256.6% y/y was noted on the Romanian market, where Cinema City opened 2 megaplexes in Bucharest, both delivering very high number of admissions.
Theatre operations, CCI’s core business line, generated EUR 106.3 million revenue (91.4% of the total CCI’s revenues) and they increased by 45.4% y/y. Revenues from the box office increased by 51.5% to EUR 72.0 million, from cinema bars by 43.3% to EUR 15.0 million and from cinema advertising by 20.9% to EUR 12.8 million. Such good theatrical performance is coming from the combination of well received international movie supply, new screens opened in the last 12 months and growing ticket prices, partly thanks to a higher percentage of admissions sold for 3D films.
The number of cinema admissions increased by 23.5% to 15.1 million. Average ticket price in EUR was up by 23.7% y/y to EUR 4.77. Average prices of tickets in local currencies grew in all markets. The increase in average ticket price is supported by a higher percentage of admissions sold for films in 3D format.
In Q2 2010 alone the theatre revenues increased by 26.9% y/y to EUR 41.9 million with the ticket revenue going up by 24.6% y/y to EUR 25.9 million, cinema bar revenue rising to EUR 8.6 million y/y (24.2% y/y) and advertising revenue going up by 39.7% y/y to EUR 7.4 million. The number of admissions increased by 6.6%, to 5.8 million. The level of tickets sold in Q2 2010 was higher in all countries of operations, except for Poland, where it went down by 9.5% y/y due to national mourning in April and presidential elections in June. Average ticket price in Q2 2010 was of EUR 4.49 (+16.9% y/y).
In H1 2010 Cinema City achieved EBITDA from theatre operations of EUR 28.1 million and EBIT of EUR 18.6 million (+135.6%).
Film distribution operations improved during the first six months of 2010. Revenues from film distribution increased by 56.4% y/y to EUR 9.1 million and EBITDA and EBIT turned to a positive number.
Plans for H2 2010
Cinema City plans to open between 5 to 7 cinemas with around 65 screens including 2 cinemas in Bulgaria, in Ruse and Stara Zagora, 2 cinemas in Poland, in Wałbrzych and in Bytom and from 1 to 3 cinemas in Romania. The Company’s is also planning to install additional around 45 digital projectors in total in all countries of operations. As at June 2010 CCI has binding commitments for 41 new multiplexes with 411 screens and is in negotiations in respect for further number of sites.
In 2010 Forum Film companies operate in 5 countries: Israel, Poland, Hungary, Bulgaria and in Romania representing Walt Disney Studio and also other independent international and local studios. This activity will be enhanced by a rich movie line-up from Walt Disney planned for this year.
Moshe J. Greidinger, Cinema City CEO comments: “I believe that the second half of the year will continue the positive trends in cinemagoing in all our markets of operations. The movie pipeline seems to be very promising and it includes a number of sequels with high admissions story from the past releases and many 3D titles like: Harry Potter, Narnia, Tangled, Tron Legacy and Megamind. We plan new cinema openings, expansion of our cinema advertising and film distribution. We will also continue analysing expansion opportunities in the markets of our operations as well as in the new countries. We always remember that we need to continue building the “cinema going” habit, and this can be done only if we keep our cinemas at the top end as well as seeing that our team will welcome our clients with the best service. ”
Cinema City International is the largest multiplex cinema operator in Central & Eastern Europe and in Israel. The Company operates 69 multiplexes with 677 screens, in 6 countries (Poland, the Czech Republic, Hungary, Romania, Bulgaria and Israel). There are 41 more multiplexes under development, which will offer over 411 new screens. In addition, Cinema City is actively involved in cinema related advertising and film distribution.
The Cinema City group employs over 3,000 people in 6 countries.
For more information, please visit www.cinemacity.nl or contact:
Director of Investor Relations
tel. (+48) 22 566 69 60 / mobile: (+48) 510 024 028
NBS Public Relations
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