Palace shutters two cinemas
Published:Friday | October 2, 2020 | 12:17 AM
Cinema company Palace Amusement Company has taken two of its four movie theatres out of commission, citing a lack of customer traffic.
At the same time, the opening date for its newly announced drive-in cinema in New Kingston remains uncertain, given ongoing restrictions on entertainment companies.
The Government’s mandated measures to contain the spread of the coronavirus, which include a cap on the number of persons who can congregate in one space, as well as curfews, have slashed earnings for Palace, which ended its financial year $131 million in the red in June. The majority of those losses, $82 million, was in the April-June fourth quarter, in the height of the near-total lockdown of the local economy, which has since been lifted. The numbers are preliminary and still subject to audit.
The closure of the two cinemas – Palace Cineplex in Liguanea, Kingston, and Palace Multiplex in Montego Bay – took effect on Wednesday, but the Palace stock, which is the most expensive on the market, gained six cents to close at $1,300.07 that day, and has since traded flat. On Monday, the stock had lost $320 of its value.
The new drive-in cinema to be erected on Dominica Drive in New Kingston is seen as a more palatable alternative for safety-conscious moviegoers.
“Securing the premises is the first step in the very intricate process of establishing a cinema, as there is much to do, including applying for a number of other licences and meeting certain requirements for an operation such as this,” Marketing Manager Melanie Graham told the Financial Gleaner.
“While we hope it could be soon, there is no definitive date at this stage, as that is beyond our control since we are totally dependent on the constraints of the curfew hours. All we can say at this time is that details on an opening are pending,” she said.
Between the government-implemented zones of special operation restrictions to curb crime and the COVID-19 restrictions, Palace Amusement has seen a compression of its annual revenue from $1.1 billion in FY 2019 from the three cinemas that made up the network at the time, to $904 million from four cinemas this year; but it still had unavoidable costs to contend with even as business waned.
Referencing Palace Cineplex in particular, the company said that on some days, the cinema sees “zero” business.
“Despite the best efforts of management to minimise overheads by way of, inter alia, negotiating with landlords, utilising fewer screens to minimise electricity cost, and staff rotation, there are various costs that are unavoidable whether or not the cinemas are operating,” the cinema company said in a market filing.
The company has not said how long the closures are expected to last, but promised future updates; nor has it said how much it expects to save. The two operations last contributed $319 million of annual revenue.
Palace’s flagship Carib 5 cinema in Cross Roads, Kingston, and the newest addition to the chain, Sunshine Palace in Portmore, St Catherine, remain open for business. The two generated revenue of $520 million at year ending June 2020.