CinemaOne incurs $7m loss for 2021

CinemaOne Ltd continues to be in the red, incurring a loss of an estimated $7 million for the year ending September 30, 2021. This was higher than 2020 when it reported a loss of an estimated $5 million.

CinemaOne's financial results reflects a sharp decline in revenue to $2.07 million from $6 million. Unlike 2020, when its gross profit was $3.78 million, this year, the profit was a mere $960,788. This was scuttled by an operating loss of $6.46 million, compared to $4.46 million in 2020 (after total expenses of $7.4 million – 2021 and $8.24 million – 2020.)

Loss before tax was $8 million this year, increasing from $5.2 million. A taxation credit of $1.06 million took its year-end loss to $6,997,483.

CinemaOne – listed on SME-tier of the stock exchange – said its performance was largely due to the impact of three lockdowns owing to the covid19 pandemic since March 2020.

It said the closure of movie theatres "had a deleterious impact on the company’s revenue and profitability during fiscal 2021...

"The extended closure period not only exceeded that of fiscal 2020 but also included significant operational restrictions during the entire period when the company was permitted to operate. Such restrictions, which were not imposed for the first half of fiscal 2020 included, inter alia, a 50 per cent capacity limitation, 10 pm closure time, and no alcohol consumption on the premises. For the two weeks prior to April 2021, the company was also prohibited from allowing any type of food and beverage consumption on its movie theatre premises.

In the initial lockdown it implemented temporary personnel and salary reductions from 50-100 per cent for all levels of staff and negotiated modified timing and/or abatement of contractual payments with landlords, key financial partners and other major suppliers.

This helped it to maintain liquidity and ensured its capacity to quickly reopen. The company also continued its phased approach to decelerated capital expenditures related to its ongoing theatre expansion project in Gulf City Mall in south Trinidad. It's main theatres at located at One Woodbrook Place, Port of Spain.

Since the sector's reopening on October 11 as a safe zone for vaccinated patrons the company said it was encouraged by attendance and spending per patron which has been consistent with pre-pandemic periods.

It however remained cautious about the protracted impact of covid19 and expected "only a gradual and protracted relaxation" of restriction measures in the interest of public safety. "As such, the company’s financial management strategy will similarly include covid19 measures such as active cash management and preservation of liquidity, staggered and reduced employment hours, and an overriding focus on the rapid return to positive EBITDA (earnings before interest, taxes, depreciation, and amortisation) generation and profitability given the recent reopening of the company’s movie theatre facilities."

CinemaOne said although market capitalisation at the current $4 price per share reduced by only -9 per cent to $25.6 million in 2021, and remained marginally above its reduced net book amount of $23 million, it did experience a second covid19 impacted year characterised by revenue reduction of approximately -66 per cent and a sequential year of significant net losses.