Profits triple at Golden Harvest
By Patrick Frater
Net profits at Orange Sky Golden Harvest, the regional exhibition group, more than doubled in the first six months of the year to HK$40 million (US$5.16 million). Revenues were up 32% at HK$741 million ($95.6 million).
The group, which opened seven new cinemas in mainland China with a total of 51 screens in Beijing, Shanghai, Xi'ning, Chengdu, Dalian, Changzhou and Zhongshan during the period, says profit growth came from continuing improvements in its Hong Kong and Taiwan businesses.
Due to the new openings, OSGH's China cinemas saw revenues more than double, compared with market growth of 40%. Losses were reduced from HK$12 million ($1.55 million) to HK$7 million ($900,000), but in its report repeatedly warned that "the Mainland China's cinema industry environment experienced severe competition."
Its six Hong Kong theatres enjoyed a 17% increase in admissions and a 27% increase in gross box office, giving the unit a revenue boost from HK$116 million ($14.5 million) to HK$141 million ($18.2 million) and a sixfold profit improvement to HK$18 million ($2.32 million).
Taiwan's Vie Show circuit, in which OSGH has a 37% share, was boosted by local blockbusters. OSGH saw its share of revenues climb 40% to HK$204 million ($26.3 million) and profits rise from HK$15.4 million $1.98 million) to HK$21.3 million ($2.75 million).
In Singapore, where its 50% owned Golden Village is market leader and OSGH's most profitable business unit, profits were barely changed at HK$27 million ($3.48 million) and revenues dropped 2%. The opening of one new complex and the reversal of tax provisions were not enough to offset the losses from the temporary closure due to renovation of its Jurong Point multiplex.
Despite the current elusiveness of profits from China, the group said it was optimistic about prospects. As of 28 August 2012, it operated 34 cinemas with 248 screens in Mainland China and had another 11 cinemas with 77 screens in various stages of internal decoration. By the end of 2013, the group expects to more than double its China operations to have 71 cinemas with 523 screens.
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