Cinema City’s top line and EBITDA came in line with the consensus expectation for 2Q12, while the operating profit and bottom line were 15% and 11% below consensus respectively in the period. Revenues came in at € 58.6m (down 6.1% y/y) for 2Q12, or 3% above the market’s expectations. The year-on-year deterioration in revenues was the consequence of lower theatre sales (down 5.5% y/y) and distribution revenues (down 13% y/y) in the second quarter. Number of tickets sold dropped 3.6% y/y to 7.6m in 2Q12, despite an increase in the average number of screens in the period (by 50 screens or 5.8% y/y). On a likefor- like basis, ticket admissions dropped by 6.6% y/y in 2Q12. The top line was affected also by a lower average ticket price in € terms (4.50 € in 2Q12 vs. 4.63 in 2Q11), although the average ticket price grew in local currency terms.
EBITDA came in at € 10.8m (down 2.4% y/y, or 4.3% y/y on an adjusted basis) in 2Q12, in line with the consensus. The EBITDA margin increased 0.7pp y/y (or 0.3pp y/y on an adjusted basis) to 18.8% in 2Q12. The improvement in profitability year-on-year was the consequence of the lack of restructuring costs, lower SG&A costs and improved profitability in the cinemas acquired from Palace Cinemas.
The company’s bottom line came in at € 2.3m (down 44% y/y) in 2Q12, or 11% below the market expectations, mainly on the back of higherthan-
expected D&A charges in the period.
As expected, the company’s revenues posted a year-on-year decline in the seasonally weak second quarter. One positive fact is that despite the lower year-on-year revenues, Cinema City managed to lift its profitability in 2Q12. The management expects to open six new cinemas with 80 screens by the end of 2012.