COMPANIES & STRATEGIES - TECHNOLOGY

Mid-year results

Gradual recovery for Kinepolis



Although moviegoers spent more money compared to the first half of 2020, this was not the case in Luxembourg City, where drinks and sweets were still prohibited by health restrictions Photo: Matic Zorman / Maison Moderne

Although moviegoers spent more money compared to the first half of 2020, this was not the case in Luxembourg City, where drinks and sweets were still prohibited by health restrictions Photo: Matic Zorman / Maison Moderne

The cinema operator Kinepolis recorded a loss of €45.8m in the first half of the year, but is seeing a promising recovery in its cinemas.

The covid-19 pandemic is certainly a saga that the Kinepolis Group could have done without: the cinema operator posted a net loss of €45.8m in the first half of the year, compared with a loss of €29.7m a year earlier, it announced on Thursday morning.

The company has faced a new wave of forced closures of most of its establishments following the second wave of covid-19. Attendance was more than three times lower than in the first half of 2020, with 2.2 million visitors in the 108 cinemas of the group, which is listed on the Brussels stock exchange.

A gradual recovery in attendance

In Luxembourg, 100,000 spectators attended screenings, 46.2% less than in the same period last year. However, the lifting of the health restrictions was felt in the second quarter, with five times more visitors than in the first.

Between March and June 2020, cinemas were only able to open for a fortnight in Luxembourg, whereas this year they are operating under a reduced capacity system introduced on 13 January. This was increased last month following the introduction of CovidCheck in the three Kinepolis cinemas in the grand duchy.

The group underlined the gradual recovery of attendance in its cinemas: in June, the average attendance rate reached 50% of the same period in 2019 and then 62% in July for the whole network.

“We are enthusiastic about the recovery of our cinemas which, despite the restrictive measures, are showing good results, with attendance figures evolving positively week by week,” confirmed Eddy Duquenne, CEO of Kinepolis Group. “Unlike last summer, this time we are helped by a richer international cinema offer.”

Strengthening the network

The Conjuring: The Devil Made Me Do It, A Quiet Place Part II, Cruella, Godzilla vs Kong and Tom and Jerry were the most successful films in the first half of the year, the exhibitor said.

In the same period, the group’s turnover reached €112.6m, three times less than in 2020, but Kinepolis notes that this amount shows a smaller decrease than the attendance figures. In concrete terms, the revenue per visitor increased--except in Luxembourg City, where the sale of drinks and sweets was prohibited.

Net financial debt increased to €542.3m on 30 June, but free cash flow benefited from the partial increase in working capital. Kinepolis also invested €7.8 million in the completion of four new cinemas, two of which are in the Greater Region. These are the Metz Waves cinema, which opened last May, and the Metz Amphitheatre, currently under construction opposite the Muse shopping centre and expected to be completed in spring 2022.

Despite the pandemic, the operator is continuing to strengthen its network, with the exception of the Canadian market, where it plans to sell four of its 40 cinemas. How come? They are located in the west of the country and are small, generating costs disproportionate to their contribution to the group’s revenues, explained a press release.

This article was originally published on Paperjam. It has been translated and edited for Delano