JOHANNESBURG — A surge in cinema attendance in the past six months has reversed the fortunes of South Africa’s largest media group, Primedia, analysts said this week.
Attendance has risen 20% since September thanks to the release of crowd-pullers including the first “The Lord of the Rings” and “Harry Potter” pics, and locally made “Mr. Bones.”
A year ago Primedia was in the doldrums due to a sharp drop in profitability in its cinema division, Ster-Kinekor, where profits had tumbled 34%.
Some of that loss was due to Primedia’s exposure to loss-making Star Century Europe, a joint venture with leisure group Kersaf.
Last month, Kersaf and Primedia sold off Star Century Europe’s loss-making cinema assets in Hungary, the Czech Republic and Slovakia for $18.5 million.
Primedia will use the proceeds to reduce its $30 million bank loan. This, coupled with increased profitability in its cinema division, has spurred stock market investment in the group, which has stakes in commercial radio and a Johannesburg soccer club.