Cineplex faces weak holiday movie lineup, but Q4 profit rises 59 per cent

TORONTO – An underwhelming lineup of Hollywood movies and controversy surrounding the North Korea comedy “The Interview,” left Cineplex Inc. feeling the pinch at the box-office during the fourth quarter, even as its other businesses delivered stronger results.

The Canadian movie exhibitor said Thursday that profits rose 59 per cent to $32.1 million during the final three months of last year, compared to $20.2 million or 32 cents per share in the same period of 2013.

Overall revenue increased 2.8 per cent to $332.2 million helped by higher concession sales and stronger results from its digital media business.

The performance capped a challenging year for the film industry as several high-profile movies, like the latest instalment of the “Fast and the Furious” franchise, were bumped into 2015, leaving voids on the movie calendar.

In the fourth quarter, attendance grew 0.9 per cent at Cineplex theatres with 19 million tickets sold, yet box-office revenues per patron dropped 3.8 per cent as fewer titles were shown in 3D.

“The movies were not as strong as we would’ve liked for the quarter,” said chief executive Ellis Jacob in an interview.

Leading ticket sales were sequels “The Hunger Games: Mockingjay – Part 1” and “The Hobbit: The Battle of the Five Armies,” though both films took a smaller percentage of the overall box-office than their predecessors, which both hit theatres around the same time a year earlier.

There were other troubles at the box-office as well, with the underperformance of family movies like “Night at the Museum: Secret of the Tomb.”

Releases like “Big Hero 6” and “Interstellar” fell short of the blockbusters from the previous year, like space drama “Gravity” which drew more viewers to higher-priced Imax tickets and Disney’s animated movie “Frozen,” screened in 3D cinemas.

Cineplex also decided to move in lockstep with U.S. exhibitors who pulled Seth Rogen comedy “The Interview” from the schedule just before its Christmas release, after an anonymous hacker organization threatened moviegoers with violence similar to the terrorist attacks of Sept. 11.

While that left the exhibitor with one less title over the holidays, the fallout from “The Interview” may have actually encouraged more people to go to the movies around Christmas, Jacob suggested.

Cineplex experienced one of its “busiest weeks ever,” he said, with more than 3 million Canadians buying tickets to a film during the week of Dec. 26 to Jan. 1, around when the controversy was at its peak.

“There was a lot of pent up discussion about ‘The Interview,’” he said. “It drove people to the movie theatre.”

Cineplex has been trying to edge away from relying on Hollywood hits to drive its bottom line, with efforts to grow into businesses like digital advertising, e-commerce, food services and live event programs.

Concession sales increased 4.8 per cent mainly on the back of the acquisitions of movie theatres in the Atlantic provinces.

Its media business, which includes advertising in its theatres and some of the country’s malls, grew 19.5 per cent to $46.9 million.

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