Reading International’s Mixed Q1 2025 Earnings Call Insights

Reading International ((RDI)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Reading International presented a mixed bag of results for Q1 2025. The company celebrated significant achievements in asset sales, debt reduction, and a notable increase in EBITDA. However, these accomplishments were tempered by declines in total and cinema revenue, alongside increased operating losses and cash flow challenges. Despite these hurdles, the company remains optimistic about a potential recovery, buoyed by a promising second quarter box office performance and improvements in F&B SPP and real estate operating income.

Asset Sales and Debt Reduction

Reading International successfully completed the sale of assets in Wellington, New Zealand, for NZD38 million. This strategic move allowed the company to eliminate NZD18.8 million of debt with Westpac and $6.1 million of Bank of America debt. As a result, the company has reduced its overall annual interest expense and holding costs, marking a significant step towards financial stability.

Positive EBITDA Improvement

The first quarter of 2025 saw Reading International achieve a positive EBITDA of $2.9 million, a remarkable 173% increase from a negative EBITDA of $4 million in Q1 2024. This improvement underscores the company’s efforts in enhancing operational efficiency and reducing expenses.

Strong Second Quarter Box Office Performance

The second quarter of 2025 brought a strong global box office performance, exceeding expectations with successful releases like ‘A Minecraft Movie’ and ‘Sinners’. These films generated substantial revenue, providing a much-needed boost to the company’s financial outlook.

F&B Spend Per Patron Milestones

Reading International achieved the highest first quarter F&B Spend Per Patron (SPP) in the history of its Australian circuit, along with the second highest in New Zealand and U.S. circuits. This milestone reflects the company’s focus on enhancing customer experience and maximizing revenue from concessions.

Improved Real Estate Operating Income

Despite a slight decrease in total revenue, Reading International’s global real estate operating income increased by 79% compared to the previous year. This growth is attributed to improved live theater performance and cost reductions, highlighting the company’s strategic focus on its real estate portfolio.

Decline in Global Total Revenue

The company reported a global total revenue of $40.2 million for Q1 2025, an 11% decrease from Q1 2024. This decline was primarily due to weaker box office performance and unfavorable foreign exchange rates, posing challenges to the company’s revenue streams.

Cinema Revenue and Operating Loss

Global cinema revenue decreased by 12% to $36.4 million in Q1 2025, while the global cinema operating loss increased by 7% compared to the previous year. These figures highlight the ongoing challenges faced by the cinema segment amid fluctuating market conditions.

Decreased Attendance and Revenue

Consolidated revenue decreased by $4.9 million to $40.2 million, with lower attendance across all three countries and a slight decrease in property rental revenue. This trend underscores the need for strategic initiatives to attract audiences back to cinemas.

Cash Flow Challenges

Net cash used in operating activities increased by $4.9 million to $7.7 million in Q1 2025 compared to Q1 2024. This increase in cash outflow highlights the financial pressures faced by the company, necessitating effective cash management strategies.

Forward-Looking Guidance

Reading International provided forward-looking guidance focused on reducing debt and advancing renovation projects to optimize operations and financial health. The company aims to enhance the cinematic experience and loyalty programs, with a strategic emphasis on improving operational efficiency and cost management. Despite a decrease in global total revenue, the company achieved a positive EBITDA and improved global operating loss, signaling a commitment to financial recovery and growth.

In conclusion, Reading International’s Q1 2025 earnings call presented a complex financial landscape, with notable achievements in debt reduction and EBITDA growth counterbalanced by revenue declines and cash flow challenges. The company’s strategic focus on asset sales, operational efficiency, and enhancing customer experience provides a pathway to potential recovery, although ongoing financial pressures remain a concern.