Reading International ((RDI)) has held its Q4 earnings call. Read on for the main highlights of the call.
Reading International’s recent earnings call painted a picture of resilience and strategic adaptation amidst external challenges. The sentiment was largely positive, driven by a strong recovery in the fourth quarter of 2024. The company reported significant improvements in revenue and EBITDA, fueled by a robust film slate and effective cost management. However, the full-year results were tempered by the 2023 Hollywood strikes, which led to a decline in total revenue and an increased net loss. Nonetheless, efforts to reduce debt and monetize real estate assets were seen as positive steps towards enhancing financial stability.
Strong Fourth Quarter Performance
Reading International reported a remarkable fourth quarter in 2024, with global total revenue hitting $58.6 million, marking a 29% increase from the same period in 2023. This achievement represents the best fourth quarter performance since 2019. Adjusted EBITDA saw a dramatic increase of over 400%, reaching $6.8 million, underscoring the company’s successful recovery efforts.
Improved Cinema and Real Estate Segments
The company’s cinema and real estate segments showed notable improvements. Global cinema revenue for Q4 2024 was $54.6 million, a 30% increase from Q4 2023. Real estate revenue also rose by 14% in the same period, with operating income experiencing a significant 148% increase, highlighting the strength of these segments.
Effective Cost Management
Reading International’s focus on cost management was evident in the reduction of net cash used in operating activities by $5.9 million in 2024. The company also made strides in monetizing real estate assets, including the sale of the Culver City office for $10 million and property assets in Wellington, NZ.
Successful Debt Reduction Initiatives
The company successfully reduced its outstanding borrowings to $202.7 million by the end of 2024, down from $210.3 million at the end of 2023. This was achieved through strategic real estate sales and refinancing efforts, demonstrating a commitment to improving financial health.
Record High Food and Beverage Spend Per Patron
For the full year 2024, Reading International achieved record highs in food and beverage spend per patron across all cinema divisions. This contributed to the company’s improved financial performance and highlighted the success of its customer engagement strategies.
Full-Year Revenue Decline
Despite a strong fourth quarter, the full-year revenue for 2024 was $210.5 million, a 5% decrease from 2023. This decline was largely attributed to the 2023 Hollywood strikes and the resultant shifts in release dates, which impacted overall revenue.
Increased Net Loss for Full Year
The company reported an increased net loss for 2024, which rose by $4.6 million to $35.3 million compared to 2023. The basic loss per share also increased to $1.58 from $1.38, reflecting the financial challenges faced throughout the year.
Impact of Cinema Closures
Reading International closed several underperforming cinemas in the U.S. and New Zealand, which impacted gross revenue. However, these closures are expected to benefit future profitability by streamlining operations.
Challenges in Box Office Recovery
The global cinema revenue for 2024 was 6% less than in 2023, indicating ongoing challenges in returning to pre-pandemic levels. This underscores the difficulties faced by the cinema industry in recovering fully from the pandemic’s impacts.
Interest Rate and Debt Challenges
Rising interest rates led to an increased interest expense by $1.7 million, affecting Reading International’s overall financial performance. This highlights the broader economic challenges impacting the company’s financial results.
Forward-Looking Guidance
Looking ahead, Reading International provided optimistic guidance, highlighting significant improvements across key operational metrics compared to the previous year. The company anticipates exciting movie lineups in 2025 to boost its cinema business, despite the challenges posed by the 2023 Hollywood strikes. Plans to upgrade theaters and explore further asset sales are underway to strengthen its financial position.
In summary, Reading International’s earnings call reflected a company navigating through external challenges with strategic initiatives and a focus on recovery. While the full-year results were impacted by industry-wide disruptions, the strong fourth quarter performance and forward-looking strategies offer a promising outlook for the future.