While many local companies suffered from the negative effects of reduced profit due to costs associated with the write off of unrealised capital gains on government bonds, Palace had a totally different experience. Net results for the March quarter fell sharply to a loss of $22 million from a profit of $2.65 million in 2012. Nevertheless, thanks to a strong first half, the company reported a $8.2 million loss compared to a profit of $5.3 million earned for the nine months of the previous year.
Operating cost fell by $16 million or 10 percent for the quarter while administrative cost was up 11 percent to $34 million but it was the slide in income that was noticeable and probably worrying. Admittedly, the March quarter is usually the worse quarter the company faces. But it is the sharpness of the drop that is surprising. In the 2012 quarter, Palace generated income of $193.5 million, this fell 21 percent or a whopping $41 million to $152.3 million.
Interestingly, the 2013 revenue performance is only 8 percent better than the 2011 quarterly income even as inflation would have affected cost and the price for goods and services sold by Palace would have gone up since 2011. The fall off in 2013 comes against the background of the company introducing a new product, the showing of live operas on screen and an encore season of opera’s best in the summer. Without them, revenues would have been lower. Year to March, the company recorded revenues of $584.7 million that is lower than the $599.5 million generated up to March 2012.
Data on the individual cinemas indicates that the sharp fall in revenues was across all locations except Palace Cineplex. Carib revenues fell $13 million, Cineplex was up $1 million, Palace Multiplex in Montego Bay dropped $13 million and Odeon in Mandeville fell by $4 million. The falloff in the two rural cinemas was far worse than for Carib, in relation to the income for the 2012 March quarter.
The picture up to the December results suggested that 2012/13 would have been by far the company’s best year, but the poor third quarter results have changed the outlook for full year’s profits completely, as it will be nigh impossible to overcome the negative impact of the loss made in the latest quarter. ICInsider understands that the fall in revenues is due primarily to a shift in a particular brand of film which would normally be shown in the March quarter but will be shown in the June quarter.
In spite of the quarterly loss, Palace had cash funds of $60 million at the end of March, while current assets exceed current liabilities by $36 million. Loans amount to $42 million with equity of $271 million.
Photo via: www.PalaceAmusement.com
[…] million made for the year to June 2012, a 26 percent increase. The results completely erased the poor March quarter when revenues fell sharply and took profits with it. Year to date revenues are up to $862 million […]