Cinema and hotel owner Amalgamated Holdings' underlying first half profit has dropped 25.4 per cent due to a less-popular film slate and a poor result from its German cinemas.
While net profit lifted 45.5 per cent to $110.9 million after the sale of its stake in its Middle East cinema business, the company's key normalised profit (before interest, discontinued operations, individually significant items and income tax) slumped to $60.9 million.
“The result has been impacted by the soft film product line-up for our exhibition business, particularly over the traditionally strong Christmas holiday trading period, with the prior half-year comparison also including the standout success of Avatar,” AHL managing director David Seargeant said in a statement.
AHL’s cinemas chains include Event Cinemas, Greater Union and Birch Carroll & Coyle. The Australian exhibition market declined by 1.3 per cent over the half-year – despite the popularity of Harry Potter and the Deathly Hollows and Inception – with the traditionally strong month of December falling 18.8 per cent.
“The results from the German circuit were further compounded by extreme weather conditions, the devaluation of the Euro against the Australian dollar and, earlier in the half year, the impacts of the Football World Cup,” Seargeant said.
The company said it had also shown a “relatively disappointing film line-up” in January but the outlook for the remainder of the financial year, particularly the May to June period, will improve.
AHL’s Australian cinema exhibition division posted a 14.1 per cent decline in normalised profit (before interest and income tax expense) to $20.23 million.
The group installed another 49 3D projectors over the half and now has 164 projectors across its entire chain, which it says is the largest deployment of any exhibitor within Australia.
Merchandising revenue grew by 5.1 per cent per admission, driven by the continued rollout of the self-serve Scoop Alley candy bar concept and sales through its Gold Class screenings.
AHL also opened a new eight-screen Event Cinema at the Top Ryde City shopping complex in north-western Sydney and completed the purchase of the Moonlight Cinema business for $1.75 million.