By Durrant Pate/ Contributor

The strike last year in Hollywood, Los Angeles by the Writers Guild of America is still being felt in Jamaica by the island’s sole cinema company, Palace Amusement, whose bottom line was seriously impaired.

The April to June 2024 quarter showed no improvement from the previous quarter with the lag in the movie industry’s recovery pace being even more evident. Due to the extended strike that lasted from May 2 to September 27, 2023, there were delayed releases of some blockbusters in the period. 

Although movie attendance increased by 107,000 patrons in the period, the absence of substantial pictures impacted the box office negatively and represented just about 50 per cent of the patronage for the comparative period in the prior year. The impact was further highlighted when the year-to-date attendance was compared.

Marked decline in patrons

This showed a reduction of approximately 154,000 patrons or a decline of 23 per cent. It is to be noted, however, that in addition to the challenge of the Hollywood strike in the current financial year, the prior year boasted extraordinary releases like Black Panther 2, Avatar 2 and Fast X: Part 1.

Of significance during the quarter under review was the positive impact in the month of June with the release of Bad Boys 4: Ride or Die on June 6 and the synchronised launch of the 4DX technology in Auditorium 4 at the Carib 5 Cinema in Cross Roads, St Andrew. 

The excitement of watching Will Smith and Martin Lawrence — two of Jamaica’s favourite actors — on screen together was high and this contributed to almost 30,000 movie lovers or 28 per cent to the quarter’s overall attendance. Other releases like Inside Out 2 and Kingdom Of The Planet Of The Apes made up the balance along with holdovers.

New 4DX format surpassed expectation

It was the anticipation of the multi-sensory adventure promised by the 4DX format that created quite the fanfare with its cinematic experience and surpassed the expectations of the patrons — including a plane crash landing in water and bullets zinging past their ears with puffs of air! The screen demand and interest for that 112-seat auditorium translated to a 87 per cent occupancy level and augurs well for future patronage.

Revenues declined by 8 per cent to $1.39 billion as at June 30, 2024, compared to $1.51 billion for the June 2023 period with most locations registering lower intake. The consolidated statement of cash flows tells the story of increased operational costs and the resultant reduction of cash provided by operational activities.

It also shows the initiatives employed to substantially reduce the loan liability. Efforts continue in that regard, as Palace Amusement assesses the current financial climate and pursue debt management strategies and financing options in order to benefit its cash flows and operations. 

Clearing Loan Facility #2

At the end of the loan moratorium period in October 2023, Loan Facility #2 was cleared with a lump sum payment from deposits held with VM Investment Limited earmarked for that purpose. Additionally, an unused parcel of land was sold in order to pay down a portion of Facility #1. 

In addition, shareholders’ equity has improved with the booking of the market valuations on two properties. As the company continue in recovery mode, the management is constantly aware of the significant increases in operating costs post covid. Line items like: peril insurance (as a result of natural disasters linked to the region); inventory and supplies costs, due to increased shipping and logistical delays, as a result of the wars, have all been impacted along with security, film and staff costs. 

The management’s response has been to strategically manage its resources amidst the ebbs and flows of the global economy and the industry — the results of which, showed a profit of approximately $72 million to June 2024 after navigating interest charges and the various expenses listed in the quarterly financials but buoyed by the sale of the parcel of land previously discussed. 

With the Hollywood strike now ended, Palace Amusement is expect the rescheduling and release of some previously delayed pictures, which should benefit the Box Office and its attendance numbers, as the cinema company moves into the next Financial Year. 

Planning for the future

The goal to ensure that the audience enjoys the ultimate movie experience which should remain high on Palace Amusement’s agenda; and that patrons are rewarded with a suite of customer service offerings from the launch of the promised digital app and interactive website early in this financial year. 

The objective of the management is on improving efficiency at the box office while increasing interaction with the patrons (both individuals and group engagements) is expected to be achieved in the months ahead, through various initiatives. 

In the meantime, the management plans to continue promoting the screen use of its locations for independent film festivals, the advertising of products and services as well as the non-screen use for corporate events such as leadership conferences and team-building exercises — in an effort to assist and improve the bottom line. 

The company will continue its technology thrust in the months ahead, as the management seeks to capitalise on the positive response of patrons to the 4DX technology.