Despite a less-than-expected performance in first-quarter 2020, Trinidad and Tobago’s CinemaONE is looking forward to the opening of its second location in Gulf City Mall.
For the period ending December 31, 2019, the movie exhibition company reported a 4.7 per cent decline in net revenue when compared to TT$3.8 million reported in the corresponding period in the year prior. Sales for the quarter was TT$3.6 million
However, it managed to curtail sales-related costs, which fell by eight per cent, but it was not enough to boost net profits. For the three-month period, gross profit reached TT$2.4 million, dropping three per ent to TT$2.5 million.
CinemaONE’S woes continued as it recorded a nine per increase in operating expense, which moved from TT$507,579 as at December 31, 2018, to TT$555,381 in the quarter under review. Profit after tax, therefore, fell by TT$15,533 and reached TT$187,499 at the end of December.
Explaining the results, Cinema One Chairman Brian Jahra noted, “The company adopted IFRS 16 during the Q1 2020 period, which resulted in the reclassification of its operating leases and the associated reduction in operating expenses, but increases in lease-related interest expense.
He added: “The adoption of IFRS 16 also impacted CinemaONE’s financial position in Q1 Fiscal 2020 with Right-of-Use Assets associated with the company’s long-term cinema venue leases augmenting the company’s asset base by [TT]$9.1M.”
Notwithstanding, the chairman underscored that a TT$40-million loan secured from Guardian Group Trust Limited (GGTL) has increased the company’s asset base by 35 per cent.
As of December 31, 2019, CinemaONE’s property, plant and equipment reflected an 8.75 increase over first-quarter 2019.
“The enhanced liquidity from GGTL’s debt financing will enable the company to complete the first phase of its strategic expansion with the launch of its second multiplex site in Gulf City Mall, where construction is rapidly advancing and the Company has set a target opening in Q3 Fiscal 2020,” Jahra commented.
In November the company revealed in a notice on the Trinidad and Tobago Stock Exchange, the closing of a TT$40-million round of debt financing arranged by Guardian Group Trust Limited.
At the time, the CinemaONE indicated it would use the funds to construct premium VIP cinemas in the Gulf City Mall, San Fernando, among other things.
“With the relationships, capital and expertise of Guardian Group Trust Limited, CinemaONE is positioned to not only complete the build-out its second luxuryCineplex site in the South of Trinidad but to also continue bringing innovation to the cinematic experience,” Jahra wrote then.