BUSINESS
08/06/2014 07:01 EDT | Updated 10/06/2014 05:59 EDT

Cineplex Profits Down; Chain Blames Underperforming Hollywood Flicks

MARVEL

TORONTO - Cineplex Inc. (TSX:CGX) says numerous underperforming Hollywood summer movies were the main reason its profit fell 19 per cent in the second quarter.

The Toronto-based theatre chain says earnings were $23.2 million, or 37 cents per share, below the $28.5 million or 45 cents per share reported in the comparable period ended June 30 a year ago.

Revenues grew 7.2 per cent to $323.5 million mainly from the recent acquisition of 24 Empire theatres in the Atlantic provinces and digital media company EK3 Technologies Inc., which has been renamed Cineplex Digital Networks.

Cineplex says attendance also got a boost from the Empire theatres, rising 3.6 per cent to 19.3 million tickets sold in the period, though same-store attendance dropped five per cent.

The biggest movies were "Captain America: The Winter Soldier" and "X-Men: Days of Future Past" while few other films managed to reach breakout hit status. Some of the flops included raunchy western-comedy "A Million Ways to Die in the West" and Tom Cruise action film "Edge of Tomorrow."

"While box office revenues fluctuate as a result of the product being released during each quarter, we continue to focus on diversification in related businesses including media, digital commerce, gaming, food service and alternative programming to offset the variability of our earnings," said chief executive Ellis Jacob in a release.

Box-office revenues inched up 0.4 per cent to $9.40 per patron on the back of premium ticket prices that included Imax titles, 3-D movies and Cineplex's VIP theatres.

At the concession stand, revenue increased 5.6 per cent to $98 million, with an average of $5.08 being spent per person.