Friday 29 Mar 2024
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KUALA LUMPUR (March 4): PPB Group Bhd is hoping that its film exhibition and distribution segment will be able to break even in its financial year ending Dec 31, 2021 (FY21).

During a media and analyst briefing today, PPB head of corporate affairs and chief executive officer of Golden Screen Cinemas (GSC) Group Koh Mei Lee said that a return to profitability is hard to predict because of the roll-out of new films.

"We do expect recovery will come in the third and fourth quarters. Hopefully, we can at least break even this year. I think that 2022 is when we expect meaningful recovery," said Koh.

When asked if the segment will be impacted in the short term by the lack of film production during the Covid-19 pandemic, Koh noted that its unit GSC Movies Sdn Bhd's distribution and film co-producing arm has five titles that can be released immediately.

She noted that filming of productions co-produced by GSC Movies is continuing and that it aims to have five to 10 films a year, comprising a mixture of bigger and smaller titles.

Koh added that these productions will not necessarily be screened via theatrical releases, noting that the group can co-produce content for video-on-demand platforms when it comes to smaller titles, which constitutes a separate stream of production.

Moreover, Koh said that many Hollywood movies have pushed the releases of films initially scheduled for 2020 to this year.

Meanwhile, GSC's cinemas have plenty of titles, as its distribution arm had successfully secured titles from Japan, Korea and China. Coupled with upcoming releases, Koh said it should have sufficient content.

When asked about the acquisition price of the assets from the MBO chain of cinemas, PPB managing director Lim Soon Huat said the amount could not be disclosed due to confidentiality agreements.

On how long it will take to recoup its investment, Koh said: "It would take us a significantly shorter time than what we would have to build a new cinema." She also noted that given the timing of the vaccine roll-outs, the acquisition is also very timely.

She also said with the global vaccine roll-outs, the film exhibition and production segment and the film industry as a whole is on the cusp of recovery. The pandemic is a temporary setback for the industry, and it is still very healthy, she added, citing the opening of cinemas in most Asian countries, including China, which is the biggest market for movies.

"When the pandemic is under control and cases are low, you can see that people have a pent up demand to want to go back to the cinemas. For China, in the month of February, they have recorded the highest ever box office with US$1.9 billion," she noted.

Moving forward, Koh said the newly acquired cinema assets will be rebranded under GSC cinemas and integrated into its existing network.

To date, GSC operates 343 screens across 34 locations in Malaysia, and 108 screens across 18 locations in Vietnam.  

Koh also added that it would be diversifying its film exhibition segment's earnings through measures such as co-producing more films, increasing the food & beverage offerings at its cinemas, and further going deeper into e-commerce.

Fo its FY20, PPB's film exhibition segment reported a loss of RM135.6 million.

At press time, shares in PPB were trading 1.17% or 22 sen lower at RM18.64, valuing it at RM26.52 billion. It saw 128,200 shares done.

Edited ByLam Jian Wyn
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