- Surge in box-office not enough to outweigh soaring costs
- Ticket sales jumped 41% to 4 billion yuan in the first half
Chinese billionaire Wang Jianlin’s Wanda Cinema Line Co. reported first-half profit that missed analysts’ estimates as costs grew faster than movie ticket sales.
Net income grew 28 percent to 804.7 million yuan ($120 million), compared with 628.4 million yuan a year ago, the company said in a statement on Monday. The results missed the 814 million yuan average of three analysts’ estimates in a Bloomberg News survey. First-half sales climbed 64 percent to 5.72 billion yuan, while operating costs increased 67 percent.
Wanda Cinema, the largest movie theater operator in China, saw ticket sales grow 41 percent to 4 billion yuan in the first six months. This outperformed nationwide box office sales, which expanded 21 percent.
Wanda Cinema is among the real estate, retail, sports and tourism group’s biggest entertainment assets, which include Legendary Entertainment -- the U.S. based producer of “Warcraft” and “Godzilla” -- and AMC Entertainment Holdings Inc., a U.S. theater-chain operator. A $5.6 billion plan to consolidate the conglomerate’s entertainment holdings has been shelved, with Wanda Cinema saying Legendary should show its ability to generate profit independently first.
China is on course to overtake the U.S. to become the world’s biggest box office next year. Total ticket sales are expected to reach $10 billion this year, according to the average of estimates from IHS Markit Ltd. and PricewaterhouseCoopers LLP.
— With assistance by Jeanne Yang