SYDNEY — The Hoyts Cinemas board was forced Tuesday to lower the company’s projected earnings for the year to June 30 after a potential bidder for its U.S. loop dropped out last last week.
Directors forecast earnings before interest, tax, depreciation and amortization (EBITDA) would reach about $A90 million ($58.5 million). They said the U.S. business’ EBITDA would be 5%-10% lower than their original estimate due to depressed cinema attendances in late April and May and the absence of a tax benefit that would have flowed from selling the 970-screen chain.
Hoyts said the U.S. sale is now unlikely in the short-term following the withdrawal of an unidentified interested party, rumored to be General Cinema, its partner in Latin America.
That’s unwelcome news for Kerry Packer’s Consolidated Press Holdings, which controls 78% of Hoyts before its takeover bid expires next Monday.
The Hoyts board also indicated net profit after tax would be affected by a reduction in future tax benefits as a result of the change of control.