UA Cinemas, one of Hong Kong’s leading movie theater operators, has collapsed. The company said on Monday morning that it had applied for voluntary liquidation.
“UA Cinemas has always been committed to providing the highest quality of cinematic entertainment to all audiences in Hong Kong since it was founded in 1985 by Mr. Ira Kaye. However, we regret to announce that UA Cinemas will cease business with immediate effect from 8 March 2021 due to unavoidable and devastating pressure faced by our operators since the beginning of the coronavirus pandemic. We would like to thank our colleagues, customers and business partners for their support with UA Cinemas over the past 36 years. Thank you everyone for taking the journey with us. To comply with the statute and to protect the interest of all shareholders, UA Cinemas has commenced winding up procedures with the Hong Kong court,” it said in a statement in Chinese and English on its website.
Hong Kong cinemas were allowed by the government to reopen three weeks ago after the latest round of virus-related closures. But the move meant that cinemas could still only operate at 50% capacity, and it came too late to save UA.
While Hong Kong exhibitors had received some financial relief from the city’s government during the first two rounds of mandatory closure in 2020, in a city with some of the world’s highest property prices, cinema operators also had to rely on landlords to provide rental relief.
The most recent closures, from Dec. 2, 2020, to Feb. 17, 2021, meant that theaters were empty during three recent peak periods — Christmas, New Year and the Lunar New Year holidays — and meant that Hong Kong cinemas had been dark for exactly six months in the last year.
Hong Kong traditionally has one of the world’s highest per capita cinema attendance rates, which means that in normal years the territory usually ranks among the world’s top 20 box office markets, despite its lowly 7.5 million population. Data published in January by Hong Kong Box Office Ltd., however, showed gross revenues last year slumped to HK$536 million ($69.2 million), down from HK$1.92 billion ($248 million) in 2019.
Last week, Orange Sky Golden Harvest, a Hong Kong stock market firm which operates cinemas in Hong Kong, Taiwan and Singapore issued a profit warning. It forecast that it would report losses of at least HK$250 million ($32 million) for calendar year 2020.
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