Cathay and Golden Village could merge into one entity to become the largest cinema operator in Singapore.

This news was reported by The Edge Singapore on Dec. 9, 2020.

The Edge Singapore specifically reported that entertainment company mm2 Asia is in talks to merge its cinema business, operating mainly under the Cathay brand, with competitor Golden Village.

mm2 Asia now runs eight Cathay cinemas in Singapore, and 14 in Malaysia.

Hong Kong-listed Orange Sky Golden Harvest Entertainment (Holdings) runs 14 cinemas under the Golden Village brand in Singapore.

The Hong Kong company, previously known as "Golden Harvest", runs a total of 35 cinemas with 285 screens in Hong Kong, Taiwan and Singapore, The Edge Singapore reported.

The merger would, however, have to gain the approval of the Competition and Consumer Commission of Singapore in relation to anti-trust issues, The Edge Singapore highlighted.

Cinema business doing badly

News of the merger between Singapore's most recognisable cinema operators comes amidst the reality that the cinema business is taking a beating.

A consolidation between two operators could help reap better economies of scale and stability, The Edge Singapore noted.

Cinema taking a beating financially

For the 2019 financial year that ended December 2019, OSGH's Singapore cinema business generated a turnover of S$139.9 million, down slightly from S$141.9 million in 2018.

Operating profit in the same period was S$24.1 million, down from S$25.9 million.

Huge drop in revenue

With the outbreak of Covid-19, the cinema business has been effectively decimated.

For the first six months till June 30, 2020, Golden Village's Singapore revenue was just S$23.7 million, due to the circuit breaker measures.

It made a loss of S$2.92 million.

Compared to previously, for the six months ended June 30, 2019, it generated revenue of S$69.2 million for its Singapore cinema business, and operating profit of S$12.2 million.

This decline, hastened by the pandemic, comes in the midst of changing consumer patterns and general disruption to the movie and cinema business.

Content streaming apps and the growth of video content on social media have been pinpointed as the causes of cinema business' decline.

We deliver more stories to you on LinkedIn

All photos via Google Maps