Reading International Balances Turnaround Gains With Debt Risks

Reading International ((RDI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Reading International’s latest earnings call struck a cautiously hopeful tone, blending solid full‑year progress with a disappointing fourth quarter. Management highlighted sharp gains in adjusted EBITDA, lower interest costs, and stronger guest engagement, yet acknowledged that weak Q4 box office, foreign‑exchange pressures, and looming debt maturities keep execution risk high.

Full-Year Profitability Improvement

Reading trimmed its net loss attributable to the company to $14.1 million in 2025, a $21.2 million improvement from 2024. Basic loss per share narrowed to $0.62 from $1.58, signaling that operating and financial initiatives are beginning to flow through to the bottom line even as revenue fell modestly.

Huge Year-over-Year Adjusted EBITDA Gain

Adjusted EBITDA jumped to $17.8 million for 2025, a 744% increase of $15.7 million year over year. Management credited disciplined cost control, gains from asset sales, and an acquisition gain on a noncontrolling interest, underscoring how non‑core disposals and tighter spending are reshaping earnings power.

Significant Debt Reduction and Lower Interest Expense

Total borrowings fell to $185.1 million at year‑end 2025 from $202.7 million a year earlier, roughly a 10% reduction even after layering in $13.6 million of Sutton Hill debt. Interest expense dropped by $3.2 million, or 15%, showing that deleveraging and refinancing efforts are easing the drag from financing costs.

Strong Cash from Investing via Asset Sales

Cash provided by investing activities surged to $37.1 million in 2025, up $33.1 million from the prior year. Proceeds from the sales of the Cannon Park property in Townsville and the Wellington assets were pivotal, reinforcing the strategy of using real estate monetization to bolster liquidity.

Operational Wins in F&B and Membership

Reading reported record food‑and‑beverage spend per person for both Q4 and the full year, excluding the pandemic closure period, signaling improved monetization of each visit. Loyalty also strengthened, with Reading Rewards surpassing 430,000 members, paid memberships in Australia and New Zealand at 22,139, and Angelika free members around 183,000, all posting strong quarter‑over‑quarter growth.

Global Cinema Operating Improvement for the Year

Global cinema operating income swung to a $3.6 million profit for 2025 from a $2.8 million loss in 2024, a 230% improvement. This turnaround came despite a 3% revenue decline, highlighting how tight expense management and better operational discipline are offsetting softer top‑line trends.

Early 2026 Box Office Momentum

Flash data from January 1 through April 1, 2026 showed global cinemas trading more than 11% ahead on a U.S. dollar basis. Management pointed to encouraging consumer response to recent releases, such as “Project Hail Mary,” and expressed confidence in a robust 2026 release slate driving the best post‑pandemic box office.

Disappointing Q4 Revenue and Quarterly Declines

Fourth‑quarter 2025 consolidated revenue fell by $8.3 million sequentially to $50.3 million, contributing to a full‑year 2025 revenue decline of 4% to $203 million. Q4 global cinema revenue slid 14% to $46.9 million, as a softer film slate and other headwinds reversed some of the year’s earlier momentum.

Quarterly Profitability Under Pressure

Q4 2025 net loss attributable to Reading widened to $2.6 million, versus $2.3 million in Q4 2024, with basic loss per share slipping to $0.11 from $0.10. Global operating performance also weakened, with Q4 moving from $1.1 million in operating income a year ago to a $1.0 million operating loss, and adjusted EBITDA down 25% to $5.1 million.

Australia and New Zealand Weakness and FX Headwinds

The Australia and New Zealand segments were notable soft spots, pressured by thinner film slates and adverse currency moves. In Q4 2025, New Zealand cinema revenue plunged 36% to $2.4 million with operating results swinging to a $372,000 loss, while Australia’s Q4 revenue dropped 13% to $18.6 million and operating income collapsed 92% to $139,000.

Liquidity Constraints and Near-Term Debt Maturities

Cash and cash equivalents stood at just $10.5 million at December 31, 2025, keeping liquidity in sharp focus for investors. Several key loans are scheduled to mature in 2026, pushing management to accelerate asset monetizations and negotiate with lenders to secure extensions or refinancing solutions.

Reliance on Asset Sales to Manage Balance Sheet

The company leaned heavily on real estate sales in 2025, monetizing Wellington and Cannon Park and now preparing to list Cinema 1,2,3 and Newbury Yard. Management intends to use sale proceeds to reduce specific loans, including facilities around $19.7 million and $6 million in size, underscoring an ongoing dependence on property disposals to manage leverage.

Theater Closures and Screen Rationalization

Reading reduced its global screen count by 4% in 2025 by closing two unprofitable theaters in the U.S. and New Zealand. At least one more U.S. theater closure is expected in 2026, with the possibility of several additional exits over the next 12 to 18 months as management prunes underperforming sites to protect profitability.

Real Estate Revenue Impact from Asset Sales

Global real estate revenue declined 16% year over year in Q4 2025 to $4.4 million, with full‑year real estate revenue down 8% to $18.4 million. These drops reflect the loss of property‑level cash flows from the Wellington and Cannon Park assets that were sold, a trade‑off for securing liquidity and paying down debt.

Forward-Looking Guidance and 2026 Outlook

Management positioned 2026 as potentially the strongest box‑office year since the pandemic, supported by early double‑digit trading growth, a promising film slate, and ongoing F&B and loyalty gains. The plan hinges on executing timely asset sales to retire specific loans and securing refinancing for several facilities, while investing selectively in recliners and premium large‑format screens to support long‑term growth.

Reading International’s call painted a company in transition, with improving profitability metrics and strong early 2026 trading offset by real liquidity and refinancing challenges. For investors, the story now centers on whether management can close planned asset sales, roll near‑term debt, and convert box‑office momentum into sustainable earnings growth without over‑reliance on real estate disposals.