ORANGE SKY GOLDEN HARVEST ENTERTAINMENT (HK: 1132), the top cinema operator in both Singapore and Taiwan, saw its 2011 profit from operations rise 37% year-on-year to 137 mln hkd thanks to steady expansion in the PRCs film distribution and cinema operations market by the Hong Kong-listed firm.
Turnover for the 12-month period was up 27% at 1.37 bln hkd while gross profit added 26% to 793 mln.
The bottom line last year was 35% higher at 96 mln hkd.
Helping matters greatly was the recent ruling from Beijing allowing more than 20 foreign movies to be screened in the country.
“This strong 2011 performance was primarily attributable to contribution from 18 new cinemas being opened in Mainland China and strong performance of our exhibition business in Taiwan and Singapore,” Orange Sky Golden Harvest Chairman and Executive Director Wu Kebo said.
Orange Sky Golden Harvest distributes films and audio visual products related to films and television programs. The company also exhibits films in Hong Kong, Malaysia, Singapore, and China, and produces motion pictures. In addition, it processes film and produces music.
In August 2011, the group entered into a settlement agreement with Legend Pictures and received a sum of 30 million usd to transfer the Group’s equity interest in Legendary back to Legendary and to terminate a non-binding MOU dated 23 September 2010 entered into between Orange Sky Golden Harvest and Legendary. The group recorded a gain of 29.4 mln hkd (net of related expenses) during the year.
During the year, the group raised additional bank borrowings of approximately 400 mln hkd and spent around 613 mln hkd in capital expenditures, mainly for new cinema projects in Mainland China, Taiwan and Singapore. Golden Harvest maintained its gearing ratio at a “reasonable level” of about 20% (2010: 6%), the company added.
Golden Harvest’s cash on hand stood at 706 mln hkd at the end of 2011.
As of end-2011, Golden Harvest was operating 53 cinemas with 405 screens across Mainland China, Hong Kong, Taiwan and Singapore, significantly up from 33 cinemas with 250 screens a year earlier.
The total number of screens increased by 62% with seating capacity jumping 43%, and most of these newly opened cinemas commenced operations in the second half of 2011.
Golden Harvest’s cinemas served approximately 29.5 million guests across the PRC, Hong Kong, Singapore and Taiwan during the year, compared to 23.8 million in 2010.
Gross box office receipts, on a full and aggregated basis, was registered at 1.67 billion hkd, representing a strong 27% growth from the year prior.
Photo: Golden Harvest
In 2011, Golden Harvest’s 53 cinemas generated 1.25 billion hkd of turnover for the group, accounting for about 88% of total revenue.
The major Hollywood blockbusters released last year were Transformers: Dark Of The Moon, Harry Potter And Deathly Hallows Part 2, Mission Impossible — Ghost Protocol, Pirates of the Caribbean 4: On Stranger Tides, X-Men First Class, Kung Fu Panda 2 and Fast And Furious 5.
Meanwhile, the major Chinese-language blockbusters were Beginning of the Great Revival (Founding of a Party) (建黨偉業), Love Is Not Blind (失戀33天) and You Are The Apple Of My Eye (那些年，我們一起追的女孩).
Golden Harvest said it is committed to pursuing visual and audio effects perfection to improve moviegoing experiences for its audiences.
Currently, all of its screens in Mainland China, Hong Kong and Taiwan have been fully installed with digital equipment and over 40% of the group’s screens are 3D compatible.
“Singapore will complete the digitalization of its projection equipment within 2012,” the company said.
In Hong Kong, the group made an alliance with D-BOX Technologies Inc. to become the first Hong Kong cinema equipped with Motion Chair D-BOX, providing an unmatched realistic immersive experience through motions perfectly synchronized with onscreen actions.
Meanwhile, In Taiwan the group is the exclusive digital IMAX operator and added three new digital IMAX screens in 2011.
“We also entered into a strategic collaboration with SONY China to introduce the unprecedented SONY 4K Projection System into our Mainland China multiplexes.
“Currently, we have installed 84 sets of SONY 4K Projection System in our Mainland China multiplexes and we believe these unrivalled visual effects would take the viewing experience to the next level,” Golden Harvest Chairman Wu added.
In 2011, the overall market gross box office receipts from urban areas in Mainland China increased 29% to 13.15 bln yuan while gross box office receipts generated by the Golden Harvest’s multiplexes in Mainland China showed a growth of 44% year-on-year to 189 mln yuan.
See also:
GOLDEN HARVEST Eyes PRC Big Screens
GOLDEN HARVEST: Seeing Gold In Silver Screens
TWO THUMBS DOWN: What’s Holding Back Cinema Stocks?
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