Europe’s second largest exhibitor Cineworld Group

Europe’s second largest exhibitor Cineworld Group has reported a 34.6% drop in pre-tax profits for the first six months of 2016, largely due to currency movements.However, group’s revenues were up 8.4% to £356.7m across the same period, with the opening of four new sites contributing to an overall 2.7% rise in admissions across its markets.

Rising revenues mean exhibitor’s board are positive about future prospects despite Brexit turmoil.

The fall in profits can largely be attributed to the steep decline of the British Pound against the Euro in the wake of June’s Brexit referendum, in which  British public voted to leave the European Union. Currency movements have cost the company £6.1m over the last six months, the company said. The year-on-year comparative figure was compounded by an £8.9m exchange rate gain in the same period in 2015.

Speaking to Screen, Cineworld deputy CFO Nisan Cohen admitted that “Brexit had an impact” but called the profit shift only a “currency translation loss”, saying that the results were “solid” and “met expectations” providing a “good base for the second half of the year”

Going forward, the company did not expect Brexit to have further implications for the business, Nisan said, claiming that “any economic slowdown” would be weathered comfortably by the cinema industry.

UK business
In the UK & Ireland, Cineworld’s big market, admissions dropped 4% in the first six months of the year, with box office takings declining 0.3%. The company’s board said it was “reflective of the film slate”.
Revenues were boosted by the performance of advertising company Digital Cinema Media (of which Cineworld owns 50%), which saw a 12.5% rise in trading.