KUALA LUMPUR (May 19): PPB Group Bhd-owned Golden Screen Cinema Sdn Bhd (GSC) continues to be the leading exhibitor in the local cinema industry with 37 locations showing movies on 361 screens in Malaysia.

PBB managing director Lim Soon Huat said in the company's latest annual report in a bourse filing today that net box office collections in Malaysia grew by 2.8% to RM905 million on the strong back of local titles in 2019.

"Operating in an increasingly saturated industry coupled with disruption from streaming services, we expect competition to intensify in the future.

"Nevertheless, we believe that GSC will continue to stay ahead by targeting various segments of the market with more unique and personalised experiences like Aurum Theatre, PlayPlus and private screening halls," he said.

In addition, he also expects the Covid-19 pandemic to impact the industry negatively as cinemas globally have faced voluntary and mandated restrictions and closures depending on the timing and severity of the pandemic in the region.

As a result, most blockbuster movies have been postponed to the later part of the year when the situation is expected to recover.

"We are, however, optimistic that when this crisis is over, people in view of their social nature will return to the communal experience of watching movies at the cinema.

"When these deferred titles are rescheduled for release, the cinemas will benefit from a much fuller slate of movie offerings. On top of that, the fatigue of staying at home and mandatory restricted movements will motivate more people to return to the cinemas to catch their favourite movies when life returns to normal," he added.

Therefore, this will help the recovery of the financial performance of this segment, he said.

He also said despite the challenges, GSC is well positioned to overcome this difficult period as it has implemented various cost-reduction measures to mitigate the loss of income and stringent cash flow management to meet its operational requirement.

"GSC remains committed to the industry. We will proceed with our refurbishment plans on a prudent scale at key locations and complete a new eight-screen, 1,140-seat cinema in Sunway Iskandar, Johor to capitalise on the increased traffic market.

"We will also revamp our existing membership programme into a full-fledged loyalty programme to reward existing customers and attract new ones," he said.

At 2.36pm, PPB added 0.24% or four sen to RM16.72 for a market capitalisation of RM23.79 billion.