TORONTO — Cineplex Galaxy Income Fund (TSX:CGX.UN) chief executive Ellis Jacob says more Canadians went to the movies during the second quarter, which pushed revenues to record levels at the exhibitor, and more than tripled profits.
“We attribute this growth to the wide and varied appeal of the movies on screen starting with ’Fast & Furious’ and ’Monsters vs. Aliens,’ which performed very well in April, a month that historically has not featured strong releases,” Jacob said during a conference call on Thursday
“In May, every weekend saw the release of a major blockbuster, which included four of the top five performing films during the quarter.”
The Toronto-based fund says it recorded net income of $19.9 million for the quarter ended June 30, more than three times higher than year-earlier profits of $6 million.
The earnings were equivalent to 62.8 cents distributable cash per unit, nearly 56 per cent higher than the 40.3 cents per unit a year earlier.
Cineplex booked revenue of $248.6 million, the highest since the fund’s inception and an increase from revenue of $209.3 million posted a year ago.
The results were helped by a variety of premium-priced events, including 3D movies like “Coraline” and IMAX screenings of “Star Trek.”
Overall, attendance revenue jumped 16.2 per cent for the quarter to $18.2 million.
The higher number of patrons also helped the company’s concession revenues, which rose nearly 20 per cent to $74.2 million from $62 million.
“In the last 12 months we haven’t raised our prices at the concession stands,” Jacobs said in an interview.
“Our focus is to attract as many people to our theatres, and we are very, very cautious” on pricing.
The fund also declared quarterly cash distributions of 31.5 cents per unit, up from 31 cents per unit paid out in the same quarter the year before.
Cineplex’s media division, which sells ad space inside its facilities and commercial spots before its movies, reported $16.3 million in profits from $14.1 million.
In recent quarters, Ellis has expressed concern that advertising sales were being hurt by the slowing economy, particularly because automotive companies were scaling back their advertising budgets and buying spots with less notice.
That made it tough for Cineplex to predict their advertising sales earlier this year, though Ellis noted things have been improving in recent months.
“The visibility is much further out, and it’s looking a lot better,” he said.
Units of the fund were unchanged at $16 in low volume trading on the Toronto Stock Exchange.