With the Cin­e­maONE Group re­port­ing a net loss of $7.4 mil­lion for fis­cal year 2024, com­pa­ny chair­man Bri­an Jahra and his wife, co-own­er and CEO, In­grid Jahra say 2025 rev­enue line is al­ready 20 per cent, which is a pos­i­tive tra­jec­to­ry.

Cin­e­maOne cur­rent­ly op­er­ates the Imax Cin­e­ma and Gem­stones  Cin­e­mas and 4DX cin­e­ma the­atre in One Wood­brook Place,  Gem­stone VIP Cin­e­mas in Gulf City Mall, and Cine­Cen­tral in Price Plaza, Ch­agua­nas.

In the com­pa­ny’s au­dit­ed fi­nan­cial state­ments for the year end­ed Sep­tem­ber 30, 2024, it re­port­ed that the high­er op­er­at­ing costs as­so­ci­at­ed with the man­age­ment of three Cine­plex sites re­sult­ed in an op­er­at­ing loss of -$1.4 mil­lion, de­spite see­ing im­prove­ments in gross rev­enue and gross prof­it.

In com­ments on the com­pa­ny’s per­for­mance in its 2024 fi­nan­cial state­ment, its chair­man ex­plained that in­creased and front-loaded lease in­ter­est costs as­so­ci­at­ed with IFRS 16 ad­just­ments for new­ly leased prop­er­ties, and the sus­pen­sion of cap­i­talised in­ter­est due to the phas­ing of cer­tain cap­i­tal ex­pen­di­tures, sig­nif­i­cant­ly in­creased fi­nance costs by 74 per cent to $5.1 mil­lion ver­sus the pri­or year (the fi­nan­cial year 2023: $2.9 mil­lion).

In break­ing down fur­ther what the IFRS 16 ad­just­ments meant, Jahra said IFRS has a lot of stan­dards, and it de­pends on which one af­fects one’s busi­ness.

“The ones that tend to af­fect re­tail in­dus­tries the most, those par­tic­u­lar­ly like our good selves who are lo­cat­ed in com­mer­cial cen­tres that have com­mer­cial land­lords.  You en­ter in­to these long-term lease­hold arrange­ments with the IFRS 16.  This par­tic­u­lar stan­dard was in­tro­duced about five years ago. What it at­tempts to do is to cap­ture the long-term li­a­bil­i­ties of a lease­hold.”

“You take the present val­ue of all of your leas­es up un­til year 15 or year 18 or how­ev­er many years your lease goes on. Then dis­count those back to the present and you have to record that as your cur­rent li­a­bil­i­ty. And then you amor­tise the as­set be­cause you have an as­set, and you have a li­a­bil­i­ty,” Jahra out­lined in a one-on-one in­ter­view with the Busi­ness Guardian.

Ex­plain­ing fur­ther, the chair­man said the cin­e­ma com­pa­ny’s Ch­agua­nas lease was in its first year of op­er­a­tion in 2024. That meant the front load­ing in­creased the busi­ness prof­it and loss (P&L) im­pact sig­nif­i­cant­ly, more than what is paid to the land­lord.

“In our case, it end­ed up be­ing about $1.5 mil­lion, al­most $2 mil­lion in front-loaded lease ex­pens­es. Those are like a sched­ule-based ex­pense that im­pacts your prof­it and loss once you fol­low the sched­ule, which ob­vi­ous­ly au­di­tors re­quire you to do. In short, your cost to op­er­ate the premis­es is heav­ier in the ear­ly years.”

“In the case of this sched­ule, I be­lieve some­where around like year five or six, it starts to get a lit­tle clos­er to equal and then it goes down be­low. You do not get a ben­e­fit, but the ben­e­fit is on the back end of the lease in­stead of the front end. That’s where I think maybe there’s a need to have the stan­dard body,” Jahra said.

Asked about div­i­dends pay­out giv­en the fi­nan­cial loss­es, he not­ed that a div­i­dend-in-kind was paid to the com­pa­ny’s share­hold­ers in the form of vouch­ers that were re­deemable for cin­e­ma tick­ets, food and bev­er­age ser­vices and use of the fa­cil­i­ties. Jahra in­di­cat­ed that it was called a loy­al­ty pro­gramme and it was al­most ful­ly sub­scribed by the close to 500 share­hold­ers.

“It’s the first phase of our loy­al­ty pro­gramme ini­tia­tive, which is called the Ci­neONE Stars, and it does give you kind of a ben­e­fit of good­ies.

“Go­ing for­ward, when we re­turn to a prof­it, we should be able to pay a div­i­dend. We haven’t erod­ed all of our re­tained earn­ings. We still have, you know, pos­i­tive eq­ui­ty in the busi­ness.”

The co-own­er In­grid Jahra out­lined that while COVID-19 end­ed for some busi­ness­es in 2022, there were some lin­ger­ing ef­fects, which af­fect­ed the cin­e­ma in­dus­try great­ly, along with the Hol­ly­wood writer strike which end­ed in Oc­to­ber 2023.

Bri­an Jahra chimed in and said, “With the pan­dem­ic al­so there was a shut­down of pro­duc­tion and be­cause just all movie pro­duc­tion stopped.”

He not­ed that if one goes back to the post-pan­dem­ic era, start­ing in 2022, there were a num­ber of wide­ly-re­leased movies that were down by al­most 40 per cent, along with the box of­fice.

Al­so in 2023, cin­e­ma at­ten­dance was down by a lit­tle more than 10 per cent .

“Last year, the pre­lim­i­nary re­sults sug­gest that the num­ber of wide re­leas­es was down close to 15 per cent.”

Fast for­ward to late last year and in­to 2025, In­grid Jahra said this year looks a lot more promis­ing, as there is more con­tent, as the writer’s strike has end­ed the in­dus­try has seen some big wins.

She said this year’s pro­jec­tions in­di­cate that at least 110 movies will be pro­duced and re­leased at over 2,000 lo­ca­tions in the US and Cana­da.

“This pos­i­tive trend is ex­pect­ed to con­tin­ue to 2026, with more than 50 wide re­leas­es al­ready slat­ed to launch that year. Dis­trib­u­tors are ag­gres­sive­ly lay­ing claim to the most­ly sought-af­ter re­lease dates.”

How does 2025 look for Cin­e­maONE?

The chair­man said the group is al­ready about 20 per cent above the rev­enue line.  

“I think once we get to 30 per cent above, which is very doable, we be­lieve. How­ev­er, it takes a lot of work, plan­ning, and good pro­gram­ming with In­grid and her team.

 “It’s a prof­itable busi­ness. It’s to in­crease the rev­enue to give it the top line to have the ab­sorp­tive ca­pac­i­ty of the cost struc­ture. We have tak­en on more costs to open up a Price Plaza, which is floor staff costs as well as lease costs, and we have over 100 em­ploy­ees now that have to be paid,” he stressed.

The group was list­ed on T&T Stock Ex­change in 2018 and qual­i­fied for tax ex­emp­tion for five years, which would have end­ed in 2023. The chair­man said for the sec­ond five years Ci­neONE’s tax rate will be at 15 per cent.

“Fif­teen per cent, mean­ing half the cor­po­rate tax rate an­dor half of the busi­ness levy and green fund levy rate. But we did not get to en­joy the first five years, due to the pan­dem­ic. The fi­nance min­is­ter could not pre­dict this when he an­nounced the tax ex­emp­tion.”

Ques­tioned on whether the oblig­a­tions of the com­pa­ny were sat­is­fied, Jahra said that all of its lenders have been work­ing with the com­pa­ny, since the COVID-19 pe­ri­od. It just hasn’t worked out the way we all want­ed to be­cause we closed that fa­cil­i­ty maybe three months be­fore the on­set of COVID. A lot of nav­i­gat­ing ex­ter­nal­i­ties since the on­set of that  fa­cil­i­ty.”

Many banks gave sev­er­al de­fer­rals. We start­ed to amor­tise the fa­cil­i­ty ear­ly last year with our first big amor­ti­sa­tion pay­ment of over $3 mil­lion. And this year was a lit­tle less.”

Fur­ther, he said the group will be adding more screens to the Gulf City lo­ca­tion and up­grad­ing its cus­tomer ser­vice.

When asked whether the group plans to ex­ist in five years, both In­grid and Bri­an chuck­led and said “yes,” es­pe­cial­ly giv­en the plans in place to en­sure the group’s con­tin­ued prof­itabil­i­ty for the next 50 years.