DESPITE a depressing performance up to December 2021, Palace Amusement Company Limited may be seeing the light at the end of the COVID-19 tunnel as a number of box office hits kept cinema doors open.
“Towards the end of the 2021 Financial Year (FY), the group reopened its cinemas in late June, after another long period of closure — this time, including Palace Multiplex in Montego Bay. Despite the curfew restrictions imposed by the Government, which resulted in the number of shows being reduced to one per day, the response to the latest in the Fast & Furious series: F9: The Fast Saga was encouraging — with over 30,000 patrons welcomed in the month of July,” the company outlined in notes for its unaudited six months report.
“Unfortunately, another wave of the COVID-19 virus caused interest to wane in August and September, when no-movement days were instituted. October saw a bump in patronage with the release of James Bond: No Time To Die and, for the first time since the pandemic, a substantial response in December to Spiderman: No Way Home,” the statement continued.
Revenue for the July to December 2021 period jumped by 248 per cent to $231.67 million when compared with 2020. While Palace Amusement recorded significant improvements in box office ticket sales and confectionary sales across all cinemas except Palace Cineplex, overall revenue from screen advertising dipped.
For the second quarter ending December 31, 2021, the company's revenues rose by 307 per cent to $151.15 million when compared to $37.14 million earned a year earlier.
Directors of the company attributed revenue growth to measures to preserve cash flow and control costs, as well as leveraging “opportunities to pivot and to generate revenues wherever possible”.
Among the initiatives Palace Amusement embarked on were registering its drive-in cinema under the e-Commerce National Delivery Solution (ENDS) programme; reintroducing mid-afternoon weekend matinees and the adjustment of show times on early curfew days; and promoting buyouts and cinema rental packages to schools and corporate entities.
Notwithstanding, direct costs weighed heavily on the group's revenues, resulting in a quarterly gross loss of $25.25 million and loss for the six months amounting to $72.28 million.
Adding into the mix operating expenses and finance costs, Palace Amusement reported a net loss of $111.65 million for the half-year and $81.7 million for the October to December 2021 quarter.
Cash and cash equivalents stood at $114.05 million as at December 31, 2021.
Directors at Palace Amusement maintain an optimistic outlook for the future of the company, having secured a loan to support its working capital needs and dissolved another.
“Further signs of confidence in the recovery of the industry was evidenced by the loan financing partnership with Victoria Mutual Investments Limited (VMIL) of $653 million. The loan was received in November 2021 and used to pay out an existing loan with Scotiabank Jamaica Limited (BNS) and, going forward, to provide working capital support to the company as a result of the reduced earnings from the pandemic,” the directors outlined.
“It is a five-year facility, including a two-year moratorium on principal repayment, with interest for that period covered in the funds borrowed. Palace Amusement is appreciative of this arrangement that will help to transition the company to a place of stability and earning,” they concluded.