Pan-Asian cinema exhibition group Orange Sky Golden Harvest revealed that profits after tax in 2014 dropped to US$1.68 million(HK$13 million) on revenues that expanded by 16% to US$140 million (HK$1.08 billion).

The slump was confirmation of a profit warning issued in February.

“The increase in turnover for the year was attributed to the new cinema ‘the sky’ in Hong Kong which was opened in December 2013 as well as 10 new multiplexes with 66 screens in Mainland China. The majority of our cinemas operating in Hong Kong and Mainland China recorded a steady growth in revenue compared with the same period last year. However, due to the incubation period of newly-opened cinemas and high depreciation expenditure and finance costs, the overall contribution from the Mainland China exhibition business is below management’s expectation,” the company said.

As of 31 December 2014, OSGH operated 87 cinemas with 645 screens across Mainland China, Hong Kong, Taiwan and Singapore and sold a total of 42 million tickets.