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S. Korean cinema chains brace for rocky Q2 amid coronavirus scare

All News 16:11 June 02, 2020

By Chung Joo-won

SEOUL, June 2 (Yonhap) -- South Korea's movie industry is expected to extend its earnings slump to the second quarter of this year due to the new coronavirus pandemic, analysts said Tuesday.

Since the first COVID-19 case here on Jan. 20, the outbreak has led to a sharp decline in the number of moviegoers and forced distributors and production studios to delay new films launches.

In the January-March period, the number of local moviegoers stood at 26 million, down 52.7 percent from 55.1 million a year ago, along with a 55.2 percent on-year fall in box office revenue, Korea Film Council data showed.

The number of moviegoers had fallen to a record low of 970,000 in April, down 92.7 percent from the previous year. The figure is expected to drop 74 percent in the April-June period from a year ago, according to brokerage estimates.

This undated photo shows an empty movie theater in central Seoul. (Yonhap)

The COVID-19 pandemic has crippled the January-March quarterly earnings of the country's big-three cinema multiplex chains -- CJ CGV, Lotte Cinema and Megabox.

In the January-March period, top multiplex chain CJ CGV reported a net loss of 118.6 billion won (US$97.3 million), compared with a net loss of 8.5 billion won a year earlier.

Its revenue plummeted 47.6 percent on-year to 243.3 billion won, with an operating loss of 71.6 billion won, compared with a profit of 23.5 billion won a year ago.

Jcontentree Corp.,, the operator of multiplex chain Megabox, saw its revenue fall to 103 billion won, down 18.4 percent from a year ago, with an operating loss of 15.6 billion won.

"The South Korean box office is walking the rockiest road ever," said Oh Tae-wan, an analyst at Korea Investment & Securities Co.

"The recovery won't come until the end of June, when the cinemas resume launching world-class blockbusters and attract the main target audience aged 20-39," he said.

Oh expects the economic fallout from COVID-19 to last longer than that of other contagious illnesses, such as the outbreak of the Middle East respiratory syndrome in 2015 and the severe acute respiratory syndrome in 2003.

A scene from "Peninsula," provided by NEW, a local film distribution company (PHOTO NOT FOR SALE) (Yonhap)

South Korean multiplex chains are pinning high hopes on the upcoming releases of new blockbuster films, starting in late June.

Zombie thriller "#Alive," starring actors Park Shin-hye and Yoo Ah-in, is set to be released on June 24. Crime thriller "Deliver Us From Evil," a 15 billion-won project starring Hwang Jung-min and Lee Jung-jae, is testing the waters for an early July launch.

Global blockbusters, including Christopher Nolan's action film "Tenet" and Walt Disney's live-action feature "Mulan," are planning on a mid-July launch. "Peninsula," a sequel to zombie thriller "Train to Busan," starring Kang Dong-won, is also pushing for a July 29 premiere.

"The South Korean box office is expected to bottom out in the second quarter and rebound, while the speed of recovery and the containment of the COVID-19 still come with uncertainties," said KB Securities analyst Lee Dong-ryun.

jwc@yna.co.kr
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