Quake hits cinema company hard
Last November’s earthquake has made a significant dent in the New Zealand earnings of cinema operator Reading International.
The chain’s Wellington entertainment centre, Courtenay Central, was out of action for more than four months, reopening at the end of March.
This week the United Statesbased company revealed that it had received a maximum insurance payout of US$25 million (NZ$36.6 million) for damage and lost business.
The company, which is demolishing its adjacent car-park building, declined to say when it hoped to rebuild on the site.
But the event could have a silver lining for long-held plans for a new Countdown supermarket and extended retail on the site.
‘‘While the earthquake has slowed the redevelopment activities in progress at that location, the demolition of the parking structure has opened additional expansion opportunities for our Courtenay Central entertainment centre,’’ the company said in its first-quarter results.
Lost patronage and buildingrelated costs shaved US$1.3m off Reading’s total revenue in New Zealand during the March quarter, which dropped to US$5.4m.
Its cinema revenue slid 14 per cent, or US$887,000, to US$5.37m, and its real estate business revenue dropped 70 per cent to US$325,000. Cinema operating income dropped to US$641,000, down 40 per cent, and the real estate arm made an operating loss of US$142,000, down 133 per cent.
However, Reading did much better in Australia and the US, with operating income rising 6 per cent to US$10.3m.
The company also announced plans to open a tenth cinema in New Zealand in either 2019 or 2020, although its Australian office would not reveal its location.
Reading is also reviewing its options over its 28-hectare property in Manukau near Auckland Airport.
Most of the land has recently been rezoned to light industrial and the rest was already suitable for heavy industrial use.
‘‘We see this property as a future value realisation opportunity. This tract is adjacent to the Auckland Airport, which has recently been expanding.’’
The demolition of Reading’s car park began in January and was scheduled to take three months.
Courtenay Central was boarded up for more than four months.