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| Sunday, 27 July 2003 |
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| News Business Features Editorial
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Turnover grows, profit after tax drops at Ceylon Theatres The Ceylon Theatres Group, excluding Lanka Ceramic Ltd and its subsidiaries, recorded a turnover of Rs 4,698 million and an after-tax profit of Rs 150 million for 2002. The Group's turnover improved by Rs 795 million while the profit after tax dropped by Rs 18 million. According to Group Chairman Anthony A. Page, the holding company's trading activities have been restricted to the film industry, which faces major constraints. According to the Ceylon Theatres annual report, admissions to cinemas during the year under review declined from 888,537 to 715,778, a 19.44 per cent drop, but revenue increased from Rs 43 million to Rs 45 million, primarily due to admission rate increases. "The decline in capacity utilisation despite the partial liberalisation of the film industry, which enabled Ceylon Theatres to procure films bypassing the National Film Corporation (NFC), gives us cause for concern," Page said. According to him, an inflow of investment can only be ensured when financial viability is assured and in the absence of growth in admissions, the future of the film industry is bleak. The local entertainment industry cannot swim against the tide sweeping through the industry worldwide. Economic necessity has prodded the industry to adopt and implement a new concept of cineplexes incorporating several cinemas within one complex. Flexible programming ensures maximising available seating capacity in each complex, justifying the substantial capital investment involved. Investors are apprehensive and cautious about making new investments because of the provisions of the NFC Act No 47 of 1971, which permits the Corporation to run the industry rather than promote it. The role of this monopolistic entity should be redefined to that of a regulatory body, he said. The industry needs a level playing field to be revived. The Entertainment Tax, now not levied on other competing forms of entertainment, should be removed from the film industry as well. Given the size of the investment that is being contemplated and the high profile it will attract, this is not an unreasonable request. "What is required is a bold initiative by the authorities, backed by political will," Page stated. The company's subsidiaries, Millers Ltd and Cargills (Ceylon) Ltd, are optimistic of the future and will continue to pursue opportunities for expansion in the food and beverage sector. The acquisition of the Walls ice-cream plant and Kist operations by Cargills last year will result in a substantial growth in the food processing segment. The Chairman said: "Cargills will expand its Food City chain of supermarkets both in Colombo and outstations to complement its food processing activities which now include ice-cream, processed meats, jams, sauces and cordials". CT Land Development Ltd will show a decline in returns consequent to its profits and income being subject to income tax on cessation of its tax exemption and because of the decision to defer the standard company policy of reviewing rentals every two years. The Directors of Ceylon Theatres are Anthony A. Page, L.R. Page, A.T.P. Edirisinghe, J.C. Page, V.R. Page, T.A. Selvaratnam, C. Wijenaike and C.K. Muttukumaru (alternate to T.A. Selvaratnam). |
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