The impact of the COVID-19 pandemic has caused CinemaONE Ltd to experience a 284.1 per cent decline in net profit for the nine months ended June 30, with an after tax loss of $1.84 million compared to a $1 million profit for the comparable period in 2019.
In his Chairman’s report for the company, Brian Jahra said: “The outbreak of the COVID-19 pandemic has triggered unprecedented challenges in the international economy and CinemaONE’s results highlight the impact of the global movie exhibition industry shutdown which commenced in March 2020.”
In compliance with the T&T Public Health Orders, CinemaONE’s theatre facilities were closed for the entirety of the company’s third quarter. The mandated closure extended for 107 days until July 2.
Jahra added that “despite a good start to the fiscal year”, CinemaONE experienced a 58 per cent decline in gross revenue for the nine month period ended June 30, 2020 as a direct consequence of COVID-19 closure requirements.
He said: “It should also be noted that Q3 (Quarter 3) has historically been the company’s strongest quarter due to the traditionally seasonal releases of major Hollywood blockbuster films.”
However, Jahra noted that in Q3 of 2020 major Hollywood releases such as Warner Brother’s Wonder Woman and Tenet, Disney’s Black Widow and Mulan as well as MGM/Universal’s No Time to Die have all been delayed to theatrical release dates between late August – November 2020.
According to Jahra, CinemaONE has swiftly responded to the COVID-19 induced financial challenges. He said that the company implemented temporary personnel and salary reductions and negotiated modified timing and/or abatement of contractual payments with landlords, key financial partners and other major suppliers.
As a result, Jahra highlighted that the company curtailed its Year To Date (YTD) Q3 Operating Loss to ($0.66M) and Net Loss to ($1.85M) for the nine month period.
In an effort to preserve liquidity, Jahra also noted that the company adopted a phased approach to capital expenditures related to ongoing theatre expansion projects in Gulf City Mall, which were also suspended for a two month period at the peak of the country’s COVID-19 lockdown.
Jahra added: “During Q3 CinemONE has worked closely with Government both in the facilitation of salary and other relief programs for CinemaONE’s employees and in the collaborative formulation of public health guidelines for the local movie exhibition industry’s re-opening.”
Although Jahra noted that the company has been encouraged by the cinema’s reopening attendance, the recent COVID-19 spike in T&T has caused Prime Minister (PM) Dr Keith Rowley to make a decision to close cinema’s for the next 27 days.
This means a further delay in the company’s projected “staggered, return to normalcy”.
Before the announcement of a scaling back on certain businesses was made by the PM on Saturday 15 August, 2020, Jahra noted that CinemaONE’s directors remained confident that the company’s current financial position and its pragmatic approach to operations and capital expenditures will enable it to be positioned for pent-up demand – which the cinema believes will resurface as new blockbuster supply constraints ease.